<PAGE>
As filed with the Securities and Exchange Commission on December 22, 1998
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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PARK PLACE ENTERTAINMENT CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 88-0400631
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
3930 HOWARD HUGHES PARKWAY 89109
LAS VEGAS, NEVADA 89109 (Zip Code)
(Address of principal executive offices)
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PARK PLACE ENTERTAINMENT CORPORATION 1998
STOCK INCENTIVE PLAN
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CLIVE S. CUMMIS
EXECUTIVE VICE PRESIDENT - LAW &
CORPORATE AFFAIRS AND SECRETARY
PARK PLACE ENTERTAINMENT CORPORATION
3930 HOWARD HUGHES PARKWAY
LAS VEGAS, NV 89109
(702) 699-5000
(Name, address, including zip code, and telephone number, including area
code, of agent for service)
COPY TO:
CYNTHIA A. ROTELL, ESQ.
LATHAM & WATKINS
633 WEST FIFTH STREET, SUITE 4000
LOS ANGELES, CALIFORNIA 90071
(213) 485-1234
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- -------------------------------- -------------------- -------------------- -------------------- --------------------
PROPOSED
AMOUNT PROPOSED MAXIMUM
OF SHARES MAXIMUM AGGREGATE AMOUNT OF
TITLE OF EACH CLASS OF TO BE OFFERING PRICE OFFERING REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED(1) PER SHARE(2) PRICE(2) FEE
- -------------------------------- -------------------- -------------------- -------------------- --------------------
<S> <C> <C> <C> <C>
Common Stock,
$0.01 par value.............. 45,000,000 $12.77 $574,650,000 $169,522
- -------------------------------- -------------------- -------------------- -------------------- --------------------
</TABLE>
(1) The Park Place Entertainment Corporation 1998 Stock Incentive Plan (the
"Plan") authorizes the issuance of a maximum of 45,000,000 shares of
common stock of Park Place Entertainment Corporation, a Delaware
corporation (the "Company"), plus reissuances of shares canceled under
the Plan, and substitutions or adjustments to shares to account for any
change in corporate capitalization, such as a stock split or a
corporate transaction, any merger, consolidation, separation, including
a spin-off, or other distribution of stock or property, any
reorganization or any partial or complete liquidation of the Company.
(2) For purposes of computing the registration fee only, pursuant to Rule
457(h)(1), the proposed Maximum Offering Price Per Share is based on
the pro forma book value of the shares as calculated on September 30,
1998.
<PAGE>
PART I
Item 1. Plan Information
Not required to be filed with this Registration Statement.
Item 2. Registrant Information and Employee Plan Annual Information
Not required to be filed with this Registration Statement.
PART II
Item 3. Incorporation of Documents by Reference
The following documents filed with the Securities and Exchange
Commission (the "Commission") by the Company are incorporated as of their
respective dates in this Registration Statement on Form S-8 (the "Registration
Statement") by reference:
(a) Amendment No. 1 to the Company's Registration Statement on
Form 10 filed with the Commission on December 18, 1998;
(b) The Company's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1998; and
(c) The Company's Current Reports on Form 8-K filed with the
Commission on November 25, 1998 and December 16, 1998.
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 and 15(d) of the Securities Exchange Act of 1934, as amended, after the date
of this Registration Statement and prior to the filing of a post-effective
amendment which indicates that all securities offered have been sold or which
deregisters all securities then remaining unsold, are incorporated by reference
in this Registration Statement and are a part hereof from the date of filing
such documents. Any statement contained in a document incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Registration Statement to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Registration
Statement.
Item 4. Description of Securities
Not required to be filed with this Registration Statement.
Item 5. Interests of Named Experts and Counsel
The legality of the securities registered hereby has been passed upon
by Clive S. Cummis, Executive Vice President - Law & Corporate Affairs and
Secretary of the Company. Mr. Cummis is expected to hold options for
approximately 500,000 shares of Common Stock pursuant to an employment agreement
Mr. Cummis is expected to enter into with the Registrant.
Item 6. Indemnification of Directors and Officers
Section 145 of the General Corporation Law of Delaware (the "DGCL")
empowers the Company to indemnify, subject to the standards set forth therein,
any person who is a party to any action in connection with any action, suit or
proceeding brought or threatened by reason of the fact that the person was a
director, officer, employee or agent of the Company, or is or was serving as
such with respect to another entity at the request of the Company. The DGCL also
provides that the Company may purchase insurance on behalf of any such director,
officer, employee or agent. Section 11.2 of the Certificate of Incorporation of
the Company provides that the Company will indemnify any person to whom, and to
the fullest extent, indemnification may be required or permitted under Section
145 of the DGCL.
Section 102(b)(7) of the DGCL enables a Delaware corporation to provide
in its certificate of incorporation for the elimination or limitation of the
personal liability of a director to the corporation or
2
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its stockholders for monetary damages for breach of fiduciary duty as a
director. Any such provision cannot eliminate or limit a director's liability
(1) for any breach of the director's duty of loyalty to the corporation or
its stockholders; (2) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law; (3) under
Section 174 of the DGCL (which imposes liability on directors for unlawful
payment of dividends or unlawful stock purchase or redemption); or (4) for
any transaction from which the director derived an improper personal benefit.
Section 11.1 of the Certificate of Incorporation of the Company eliminates
the liability of a director of the Company to the Company or its stockholders
for monetary damages for breach of fiduciary duty as a director to the
fullest extent permitted by the DGCL.
Item 7. Exemption from Registration Claimed
Not applicable.
Item 8. Exhibits
The following is a list of exhibits filed as part of this Registration
Statement, which are incorporated herein:
<TABLE>
<S> <C>
4.1 Amended and Restated Certificate of Incorporation of the Registrant
4.2 Amended and Restated Bylaws of the Registrant
4.3 Park Place Entertainment Corporation 1998 Stock Incentive Plan
5.1 Opinion of Clive S. Cummis
23.1 Consent of Clive S. Cummis (included as part of Exhibit 5.1)
23.2 Consent of Arthur Andersen LLP
24 Power of Attorney (included on the signature page of this
Registration Statement)
</TABLE>
Item 9. Undertakings
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended (the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising
after the effective date of this Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the Registration
Statement. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in
3
<PAGE>
volume and price represent no more than 20 percent change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement;
PROVIDED, HOWEVER, that paragraphs (1)(i) and (1)(ii) shall not apply
if the Registration Statement is on Form S-3, Form S-8 or Form F-3 and the
information to be included in a post effective amendment to those paragraphs is
contained in periodic reports filed with or furnished to the Commission by the
Registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), that are incorporated by reference
in this Registration Statement.
(2) That, for purposes of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in this Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel that
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
4
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Company certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Newark, State of New Jersey, on this 22nd day of
December, 1998.
PARK PLACE ENTERTAINMENT CORPORATION
By: /s/ Clive S. Cummis
---------------------------------
Clive S. Cummis
Executive Vice President - Law &
Corporate Affairs and Secretary
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints
Scott A. LaPorta and Clive S. Cummis, and each of them, with full power to act
without the other, such person's true and lawful attorneys-in-fact and agents,
with full power of substitution and resubstitution, for him and in his name,
place and stead, in any and all capacities, to sign this Registration Statement,
and any and all amendments thereto (including pre- and post-effective
amendments) or any registration statement for the same offering that is to be
effective upon filing pursuant to Rule 462(b) under the Securities Act of 1933,
as amended, and to file the same, with exhibits and schedules thereto, and other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents, and each of them, full power
and authority to do and perform each and every act and thing necessary or
desirable to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or any of them, or their or his
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement on Form S-8 has been signed below by the following
persons in their capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Stephen F. Bollenbach Chairman of the Board December 22, 1998
- -----------------------------
Stephen F. Bollenbach
/s/ Arthur M. Goldberg Director, President and Chief December 22, 1998
- ----------------------------- Executive Officer (Principal Executive
Arthur M. Goldberg Officer)
/s/ Scott A. LaPorta Executive Vice President and Chief December 22, 1998
- ----------------------------- Financial Officer (Principal Financial
Scott A. LaPorta Officer)
</TABLE>
S-1
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT PAGE
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<S> <C> <C>
4.1 Amended and Restated Certificate of Incorporation of the Registrant
4.2 Amended and Restated Bylaws of the Registrant
4.3 Park Place Entertainment Corporation 1998 Stock Incentive Plan
5.1 Opinion of Clive S. Cummis
23.1 Consent of Clive S. Cummis (included as part of Exhibit 5.1)
23.2 Consent of Arthur Andersen LLP
24 Power of Attorney (included on the signature page of this
Registration Statement)
</TABLE>
<PAGE>
Exhibit 4.1
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
PARK PLACE ENTERTAINMENT CORPORATION
The Corporation was incorporated under the name "Gaming Co., Inc." by
the filing of its original Certificate of Incorporation with the Secretary of
State of the State of Delaware on June 10, 1998. This Amended and Restated
Certificate of Incorporation of the Corporation, which both restates and
amends the provisions of the Corporation's Certificate of Incorporation (as
amended and restated, this "Certificate of Incorporation"), was duly adopted
in accordance with the provisions of Sections 242 and 245 of the General
Corporation Law of the State of Delaware (the "DGCL") and by written consent
of the Corporation's sole stockholder in accordance with Section 228 of the
DGCL. The Certificate of Incorporation of the Corporation is hereby amended
and restated to read in its entirety as follows:
ARTICLE I.
The name of the corporation (which is hereinafter referred to as "the
Corporation") is Park Place Entertainment Corporation.
ARTICLE II.
The address of the registered office of the Corporation in the State of
Delaware is 1013 Centre Road, in the City of Wilmington, County of New
Castle, State of Delaware 19805. The name of the Corporation's registered
agent is Corporation Service Company.
ARTICLE III.
The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the DGCL.
ARTICLE IV.
SECTION 4.1. CAPITAL STOCK.
The total number of shares of all classes of stock which the Corporation
shall have the authority to issue is Five Hundred Million (500,000,000)
shares consisting of Four Hundred Million (400,000,000) shares of common
stock, par value $.01 per share (the "Common Stock"), and One Hundred Million
(100,000,000) shares of preferred stock, par value $.01 per share (the
"Preferred Stock").
SECTION 4.2. COMMON STOCK.
The shares of authorized Common Stock of the Corporation shall be
identical in all
<PAGE>
respects and shall have equal rights and privileges.
SECTION 4.3. PREFERRED STOCK.
The Board of Directors shall have authority to issue the shares of
Preferred Stock from time to time on such terms as it may determine, and to
divide the Preferred Stock into one or more series and in connection with the
creation of any such series to fix by the resolution or resolutions providing
for the issue of shares thereof the voting powers, full or limited, or no
voting powers, the designations, powers and relative, participating,
optional, or other special rights of such series, and qualifications,
limitations, or restrictions thereof, to the full extent now or hereafter
permitted by law.
SECTION 4.4. VOTING POWER FOR HOLDERS OF COMMON AND PREFERRED STOCK.
Except as otherwise provided in this Certificate of Incorporation, each
holder of Common Stock shall be entitled to one vote for each share of Common
Stock held by him or her on all matters submitted to stockholders for a vote
and each holder of any series of Preferred Stock shall be entitled to such
number of votes for each share held by him or her as may be specified herein
or in the Certificate of Designation in respect thereof.
ARTICLE V.
The amount of the authorized stock of the Corporation of any class or
classes may be increased or decreased by the affirmative vote of the holders
of a majority of the stock of the Corporation entitled to vote generally in
the election of Directors, voting together as a single class.
ARTICLE VI.
SECTION 6.1. NUMBER, ELECTION AND TERMS OF DIRECTORS.
Subject to the rights of the holders of any series of Preferred Stock to
elect additional directors under specified circumstances, the number of the
directors of the Corporation (each, a "Director" and collectively, the
"Directors") which shall constitute the entire board shall be not less than
one nor more than 20. Within such limits, the exact number of directors
constituting the entire board shall be fixed from time to time exclusively
pursuant to a resolution adopted by a majority of the total number of
Directors which the corporation would have if there were no vacancies (the
"Whole Board"). The Directors, other than those who may be elected by the
holders of any series of Preferred Stock, shall be divided, with respect to
the time for which they severally hold office, into three classes, as nearly
equal in number as reasonably possible, with the term of office of the first
class to expire at the 2000 annual meeting of stockholders, the term of
office of the second class to expire at the 2001 annual meeting of
stockholders and the term of office of the third class to expire at the 2002
annual meeting of stockholders, with each Director to hold office until his
or her successor shall have been duly elected and qualified. At each annual
meeting of stockholders of the Corporation, (i) Directors elected to succeed
those Directors whose terms then expire shall be elected for a term of office
to expire at the third
2
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succeeding annual meeting of stockholders after their election, with each
Director to hold office, subject to any qualifications or approvals required
under any Gaming Laws (as hereinafter defined in Article X), until his or her
successor shall have been duly elected and qualified, and (ii) if authorized
by a resolution of the Board of Directors, Directors may be elected to fill
any vacancy on the Board of Directors, regardless of how such vacancy shall
have been created. For purposes of this Certificate of Incorporation, an
individual shall be qualified to serve as a Director only for so long as such
individual is determined to be, and continues to be, qualified by all
applicable Gaming Authorities (as hereinafter defined in Article X) and under
all applicable Gaming Laws, as required, and in the event such individual
does not continue to be so qualified, such individual shall be disqualified
and shall cease to be a Director.
SECTION 6.2. STOCKHOLDER NOMINATION OF DIRECTOR CANDIDATES AND
INTRODUCTION OF BUSINESS.
Advance notice of stockholder nominations for the election of Directors
and advance notice of business to be brought by stockholders before an annual
or special meeting of the stockholders shall be given in the manner provided
in the By-Laws of the Corporation.
SECTION 6.3. VACANCIES AND NEWLY CREATED DIRECTORSHIPS.
Subject to applicable law and the rights of the holders of any series of
Preferred Stock to elect additional directors under specified circumstances,
and unless the Board of Directors otherwise determines, vacancies resulting
from death, resignation, retirement, disqualification, removal from office or
other cause, and newly created directorships resulting from any increase in
the authorized number of Directors, may be filled only by the affirmative
vote of a majority of the remaining Directors, though less than a quorum of
the Board of Directors. Subject to the obtaining of approval by any Gaming
Authority required before such person can become, or serve as, a Director,
any Director so chosen pursuant to the preceding sentence shall hold office
for the remainder of the full term expiring at the annual meeting of the
stockholders at which the term of office of the class to which such Director
has been elected expires and until such Director's successor shall have been
duly elected and qualified. No decrease in the number of authorized Directors
constituting the Board of Directors shall shorten the term of any incumbent
Director.
SECTION 6.4. REMOVAL.
Subject to the rights of the holders of any series of Preferred Stock to
elect Directors under specified circumstances, any Director may be removed
from office, but only "for cause," and only by the affirmative vote of the
holders of at least 75% of the voting power of all shares of capital stock of
the Corporation entitled to vote generally in the election of directors,
voting together as a single class. For the purposes of this Section 6.4,
"for cause" shall mean (i) the willful and continuous failure of a Director
to substantially perform or observe his or her duties to the Corporation
(other than any such failure resulting from physical or mental incapacity of
such Director), or (ii) the willful engagement by a Director in gross
misconduct which is materially and demonstrably injurious to the Corporation.
3
<PAGE>
SECTION 6.5. ELECTION BY BALLOTS.
Election of Directors need not be by ballot unless the By-Laws of the
Corporation shall so provide.
SECTION 6.6. CONSIDERATION.
Directors and officers, in exercising their respective powers with a
view to the interests of the Corporation, may consider:
(A) the interests of the Corporation's employees, suppliers, creditors
and customers;
(B) the economy of the state and nation;
(C) the interests of the community and of society; and
(D) the long-term as well as short-term interests of the Corporation
and its stockholders, including the possibility that these interests may be
best served by the continued independence of the Corporation.
This Section 6.6 does not create or authorize any causes of action
against the Corporation or its Directors or officers.
ARTICLE VII.
Subject to the rights of the holders of any series of Preferred Stock,
any action required or permitted to be taken by the stockholders of the
Corporation must be effected at a duly called annual or special meeting of
such holders and may not be effected by any consent in writing by such
holders. Subject to the rights of the holders of any series of Preferred
Stock, special meetings of stockholders of the Corporation may be called only
by the Chairman of the Board or by the Board of Directors pursuant to a
resolution adopted by a majority of the Whole Board.
ARTICLE VIII.
The Board of Directors shall have power to make, alter, amend and repeal
the By-Laws of the Corporation. Any By-Laws made by the Directors under the
powers conferred hereby may be altered, amended or repealed by the Directors
or by the stockholders. Notwithstanding the foregoing and anything contained
in this Certificate of Incorporation to the contrary, none of the provisions
of the By-Laws shall be altered, amended or repealed by the stockholders
without the affirmative vote of the holders of at least 75% of the voting
power of all the shares of the Corporation entitled to vote generally in the
election of Directors, voting together as a single class.
ARTICLE IX.
SECTION 9.1. VOTE REQUIRED FOR CERTAIN BUSINESS COMBINATIONS.
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(A) HIGHER VOTE FOR CERTAIN BUSINESS COMBINATIONS.
In addition to any affirmative vote required by law or this Certificate
of Incorporation, and except as otherwise expressly provided in Section 9.2:
(i) any merger or consolidation of the Corporation or any
Subsidiary (as hereinafter defined) with (a) any Interested Stockholder (as
hereinafter defined) or (b) any other corporation (whether or not itself an
Interested Stockholder) which is, or after such merger or consolidation would
be, an Affiliate (as hereinafter defined) of an Interested Stockholder; or
(ii) any sale, lease, exchange, mortgage, pledge, transfer or
other disposition (in one transaction or a series of transactions) to or with
any Interested Stockholder or any Affiliate of any Interested Stockholder of
any assets of the Corporation or any Subsidiary having an aggregate Fair
Market Value (as hereinafter defined) of $20,000,000 or more; or
(iii) the issuance or transfer by the Corporation or any
Subsidiary (in one transaction or a series of transactions) of any securities
of the Corporation or any Subsidiary to any Interested Stockholder or any
Affiliate of any Interested Stockholder in exchange for cash, securities or
other property (or a combination thereof) having an aggregate Fair Market
Value of $20,000,000 or more; or
(iv) the adoption of any plan or proposal for the liquidation or
dissolution of the Corporation proposed by or on behalf of an Interested
Stockholder or any Affiliate of any Interested Stockholder; or
(v) any reclassification of securities (including any reverse
stock split), or recapitalization of the Corporation, or any merger or
consolidation of the Corporation with any of its Subsidiaries or any other
transaction (whether or not with or into or otherwise involving an Interested
Stockholder) which has the effect, directly or indirectly, of increasing the
proportionate share of the outstanding shares of any class of equity or
convertible securities of the Corporation or any Subsidiary which is directly
or indirectly owned by any Interested Stockholder or any Affiliate of any
Interested Stockholder;
shall require the affirmative vote of the holders of at least 75% of the
voting power of the then outstanding shares of capital stock of the
Corporation entitled to vote generally in the election of directors (for the
purposes of this Article IX, the "Voting Stock"), voting together as a single
class. Such affirmative vote shall be required notwithstanding the fact that
no vote may be required, or that a lesser percentage may be specified, by law
or in any agreement with any national securities exchange or otherwise.
(B) DEFINITION OF "BUSINESS COMBINATION."
5
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The term "Business Combination" as used in this Article IX shall mean
any transaction which is referred to in any one or more of clauses (i)
through (v) of paragraph (A) of this Section 9.1.
SECTION 9.2. WHEN HIGHER VOTE IS NOT REQUIRED.
The provisions of Section 9.1 shall not be applicable to any particular
Business Combination, and such Business Combination shall require only such
affirmative vote as is required by law or in any agreement with any national
securities exchange or otherwise and any other provision of this Certificate
of Incorporation, if all of the conditions specified in either of the
following paragraphs (A) and (B) are met:
(A) APPROVAL BY DISINTERESTED DIRECTORS.
The Business Combination shall have been approved by a majority of the
Disinterested Directors (as hereinafter defined).
(B) PRICE AND PROCEDURE REQUIREMENTS.
All of the following conditions shall have been met:
(i) The aggregate amount of the cash and the Fair Market Value as
of the date of the consummation of the Business Combination of consideration
other than cash to be received per share by holders of Common Stock in such
Business Combination shall be at least equal to the higher of the following:
(a) if applicable, the highest per share price (including any
brokerage commissions, transfer taxes and soliciting dealers' fees) paid by
the Interested Stockholder for any shares of Common Stock acquired by it (1)
within the two-year period immediately prior to the first public announcement
of the proposal of the Business Combination (the "Announcement Date") or (2)
in the transaction in which it became an Interested Stockholder, whichever is
higher; and
(b) the Fair Market Value per share of Common Stock on the
Announcement Date or on the date on which the Interested Stockholder became
an Interested Stockholder (such later date is referred to in this Article IX
as the "Determination Date"), whichever is higher.
(ii) The aggregate amount of the cash and the Fair Market Value as
of the date of the consummation of the Business Combination of consideration
other than cash to be received per share by holders of shares of any other
class of outstanding Voting Stock, (other than Excluded Preferred Stock, as
hereinafter defined) shall be at least equal to the highest of the following
(it being intended that the provisions of this paragraph (B) (ii) shall be
required to be met with respect to every class of outstanding Voting Stock
(other than Excluded Preferred Stock), whether or not the Interested
Stockholder has previously acquired any shares of a particular class of
Voting Stock):
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<PAGE>
(a) if applicable, the highest per share price (including any
brokerage commissions, transfer taxes and soliciting dealers' fees) paid by
the Interested Stockholder for any shares of such class of Voting Stock
acquired by it (1) within the two-year period immediately prior to the
Announcement Date or (2) in the transaction in which it became an Interested
Stockholder, whichever is higher;
(b) if applicable, the highest preferential amount per share
to which the holders of shares of such class of Voting Stock are entitled in
the event of any voluntary or involuntary liquidation, dissolution or winding
up of the Corporation; and
(c) the Fair Market Value per share of such class of Voting
Stock on the Announcement Date or on the Determination Date, whichever is
higher.
(iii) The consideration to be received by holders of a particular
class of outstanding Voting Stock (including Common Stock and other than
Excluded Preferred Stock) shall be in cash or in the same form as the
Interested Stockholder has previously paid for shares of such class of Voting
Stock. If the Interested Stockholder has paid for shares of any class of
Voting Stock with varying forms of consideration, the form of consideration
for such class of Voting Stock shall be either cash or the form used to
acquire the largest number of shares of such class of Voting Stock previously
acquired by it. The price determined in accordance with paragraphs (B)(i)
and (B)(ii) of this Section 9.2 shall be subject to appropriate adjustment in
the event of any stock dividend, stock split, combination of shares or
similar event.
(iv) After such Interested Stockholder has become an Interested
Stockholder and prior to the consummation of such Business Combination: (a)
except as approved by a majority of the Disinterested Directors, there shall
have been no failure to declare and pay at the regular date therefor any full
quarterly dividends (whether or not cumulative) on any outstanding Preferred
Stock; (b) there shall have been (1) no reduction in the annual rate of
dividends paid on the Common Stock (except as necessary to reflect any
subdivision of the Common Stock), except as approved by a majority of the
Disinterested Directors, and (2) an increase in such annual rate of dividends
as necessary to reflect any reclassification (including any reverse stock
split), recapitalization, reorganization or any similar transaction which has
the effect of reducing the number of outstanding shares of the Common Stock,
unless the failure so to increase such annual rate is approved by a majority
of the Disinterested Directors; and (c) such Interested Stockholder shall
have not become the beneficial owner of any additional shares of Voting Stock
except as part of the transaction which results in such Interested
Stockholder becoming an Interested Stockholder.
(v) After such Interested Stockholder has become an Interested
Stockholder, such Interested Stockholder shall not have received the benefit
directly or indirectly (except proportionately as a stockholder or in the
ordinary course of the Corporation's business) of any loans, advances,
guarantees, pledges or other financial assistance or any
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tax credits or other tax advantages provided by the Corporation, whether in
anticipation of or in connection with such Business Combination or otherwise.
(vi) A proxy or information statement describing the proposed
Business Combination and complying with the requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and the rules and
regulations thereunder (or any subsequent provisions replacing such act,
rules or regulations) shall be mailed to public stockholders of the
Corporation at least 30 days prior to the consummation of such Business
Combination (whether or not such proxy or information statement is required
to be mailed pursuant to such Act or subsequent provisions).
SECTION 9.3. CERTAIN DEFINITIONS.
For the purposes of this Article IX:
(A) "Affiliate" or "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the rules and regulations under the
Exchange Act.
(B) A person shall be a "beneficial owner" of any Voting Stock:
(i) which such person or any of its Affiliates or Associates
beneficially owns, directly or indirectly; or
(ii) which such person or any of its Affiliates or Associates has
(a) the right to acquire (whether such right is exercisable immediately or
only after the passage of time), pursuant to any agreement, arrangement or
understanding or upon the exercise of conversion rights, exchange rights,
warrants or options, or otherwise, or (b) the right to vote pursuant to any
agreement, arrangement or understanding; or
(iii) which are beneficially owned, directly or indirectly, by any
other person with which such person or any of its Affiliates or Associates
has any agreement, arrangement or understanding for the purpose of acquiring,
holding, voting or disposing of any shares of Voting Stock.
(C) In the event of any Business Combination in which the
Corporation survives, the phrase "consideration other than cash to be
received" as used in paragraphs (B)(i) and (B)(ii) of Section 9.2 shall
include the shares of Common Stock and/or the shares of any other class of
outstanding Voting Stock retained by the holders of such shares.
(D) "Disinterested Director" means any member of the Board of
Directors of the Corporation who is unaffiliated with the Interested
Stockholder and was a member of the Board of Directors prior to the time that
the Interested Stockholder became an Interested Stockholder, and any Director
who is thereafter appointed to fill any vacancy on such Board or who is
elected and, in either event, who is unaffiliated with the Interested
Stockholder and in connection with his or her initial assumption of office is
recommended for appointment or election by a majority of Disinterested
Directors then on the Board of Directors.
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(E) "Excluded Preferred Stock" means any series of Preferred Stock
with respect to which the Certificate of Designation creating such series
expressly provides that the provisions of this Article IX shall not apply.
(F) "Fair Market Value" means: (i) in the case of stock, the
highest closing sale price during the 30-day period immediately preceding the
date in question of a share of such stock on the Composite Tape for New York
Stock Exchange Listed Stocks, or if such stock is not quoted on the Composite
Tape, on the New York Stock Exchange, or, if such stock is not listed on such
exchange, on the principal United States securities exchange registered under
the Exchange Act on which such stock is listed, or, if such stock is not
listed on any such exchange, the highest closing bid quotation with respect
to a share of such stock during the 30-day period preceding the date in
question on the Nasdaq National Market or any system then in use, or if no
such quotations are available, the fair market value on the date in question
of a share of such stock as determined by the Board of Directors in good
faith; and (ii) in the case of property other than cash or stock, the fair
market value of such property on the date in question as determined by the
Board of Directors in good faith.
(G) "Interested Stockholder" means any person (other than the
Corporation or any Subsidiary, as hereinafter defined) who or which:
(i) is the beneficial owner, directly or indirectly, of more
than 10% of the voting power of the outstanding Voting Stock; or
(ii) is an Affiliate of the Corporation and at any time
within the two-year period immediately prior to the date in question was the
beneficial owner, directly or indirectly, of 10% or more of the voting power
of the then outstanding Voting Stock; or
(iii) is an assignee of or has otherwise succeeded to any
shares of Voting Stock which were at any time within the two-year period
immediately prior to the date in question beneficially owned by any
Interested Stockholder, if such assignment or succession shall have occurred
in the course of a transaction or series of transactions not involving a
public offering within the meaning of the Securities Act of 1933, as amended.
For the purposes of determining whether a person is an Interested Stockholder
pursuant to paragraph (G) of this Section 9.3, the number of shares of Voting
Stock deemed to be outstanding shall include shares deemed owned by such
person through application of paragraph (B) of this Section 9.3 but shall not
include any other shares of Voting Stock owned by any other person which may
be issuable pursuant to any agreement, arrangement or understanding, or upon
exercise of conversion rights, warrants or options, or otherwise.
(H) A "person" means any individual, firm, corporation, limited
liability company, trust or other entity.
(I) "Subsidiary" means any corporation of which a majority of any
class of equity security is owned, directly or indirectly, by the
Corporation; PROVIDED, HOWEVER, that for the purposes of the definition of
Interested Stockholder set forth in paragraph (G) of this Section 9.3,
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the term "Subsidiary" shall mean only a corporation of which a majority of
each class of equity security is owned, directly or indirectly, by the
Corporation.
SECTION 9.4. POWERS OF THE BOARD OF DIRECTORS.
A majority of the Whole Board shall have the power and duty to determine
for the purposes of this Article IX, on the basis of information known to
them after reasonable inquiry, (A) whether a person is an Interested
Stockholder, (B) the number of shares of Voting Stock beneficially owned by
any person, (C) whether a person is an Affiliate or Associate of another, and
(D) whether the assets which are the subject of any Business Combination
have, or the consideration to be received for the issuance or transfer of
securities by the Corporation or any Subsidiary in any Business Combination
has, an aggregate Fair Market Value of $20,000,000 or more. A majority of
the Whole Board shall have the further power to interpret all of the terms
and provisions of this Article IX.
SECTION 9.5. NO EFFECT ON FIDUCIARY OBLIGATIONS OF INTERESTED
STOCKHOLDERS.
Nothing contained in this Article IX shall be construed to relieve any
Interested Stockholder from any fiduciary obligation imposed by law.
ARTICLE X.
(A) If the Corporation becomes, and so long as it remains, either a
holding company or an intermediary holding company subject to regulation
under any Gaming Laws, all Securities (as hereinafter defined) of the
Corporation shall be held subject to the applicable provisions of such Gaming
Laws. If any person (as hereinafter defined) which beneficially owns
Securities of the Corporation (i) is requested or required pursuant to any
Gaming Law to appear before, or submit to the jurisdiction of, or provide
information to, any Gaming Authority and either refuses to do so or otherwise
fails to comply with such request or requirement within a reasonable period
of time or (ii) is determined or shall have been determined by any Gaming
Authority not to be suitable or qualified with respect to the beneficial
ownership of Securities of the Corporation, then at the election of the
Corporation (unless otherwise required by any Gaming Authority or Gaming
Law): (a) each such person owning such Securities in the Corporation hereby
agrees to sell to the Corporation and the Corporation shall have the absolute
right in its sole discretion to repurchase, any or all of the Securities of
the Corporation beneficially owned by such person at a price determined
pursuant to paragraph (C) hereof; or (b) each such person owning such
Securities in the Corporation hereby agrees to otherwise dispose of his or
her interest in the Corporation within the 120 day period commencing on the
date on which the Corporation receives notice from a Gaming Authority of such
holder's unsuitability or disqualification (or an earlier time if so required
by a Gaming Authority or any Gaming Law) and the Corporation shall have no
obligation to repurchase, any or all of the Securities of the Corporation
beneficially owned by such person. The operation of this Article X shall not
be stayed by an appeal from a determination of any Gaming Authority.
(B) If the Corporation intends to repurchase Securities beneficially
owned by any person referred to in clause (i) or (ii) of paragraph (A)
hereof, it shall notify the person in writing
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of such intention, specifying the Securities to be repurchased, the date,
time and place when such repurchase will be consummated (the "Repurchase
Date"), which date in no event will be earlier than three business days after
the date of such notice, and the price at which such Securities will be
repurchased (it being sufficient for the purposes of this Article X for the
Corporation to indicate generally that the price will be determined in
accordance with paragraph (C) hereof). If the Corporation gives the notice
provided for by the preceding sentence (the "Repurchase Notice"), such notice
shall be deemed to constitute a binding agreement on the part of the
Corporation to repurchase, and on the part of the person notified to sell,
the Securities referred to in such Notice in accordance with this Article X.
Following the Repurchase Date (or an earlier date if required by any Gaming
Authority or Gaming Law), no dividends will be payable on and no voting
rights will be available to the holders of any Securities covered by such
Repurchase Notice which has not been duly delivered by the holder thereof for
repurchase by the Corporation. If, following such Repurchase Date, any
Securities with respect to which a Repurchase Notice has been given have not
been duly delivered by the holder thereof for repurchase by the Corporation,
the Corporation shall deposit in escrow or otherwise hold in trust for the
benefit of such holder an amount equal to the aggregate Market Price (as
hereinafter defined) of the stock to be repurchased except that to the extent
New Shares (as hereinafter defined) are to be repurchased and the Purchase
Price (as hereinafter defined) thereof shall have been publicly disclosed or
otherwise made available to the Corporation, the amount deposited in escrow
or otherwise segregated with respect to such New Shares may be the lesser of
the Market Price thereof on the date of the Repurchase Notice and the
Purchase Price thereof. The establishment of such an account shall in no way
alter the amount otherwise payable to any person pursuant to this Article X.
No interest shall be paid on or accrue with respect to any amount so
deposited or held.
(C)
(i) In the event that the person to whom a Repurchase Notice is
directed pursuant to paragraph (B) hereof has acquired beneficial ownership
of Securities within the 24-month period terminating on the date of such
Notice ("New Shares"), the price at which the Corporation shall repurchase
such New Shares as are covered by the Repurchase Notice shall be the lesser
of the Market Price thereof on the date of such Notice and the Purchase Price
thereof.
(ii) In the event that the person to whom a Repurchase Notice is
directed pursuant to paragraph (B) hereof has acquired beneficial ownership
of any or all of his or her Securities prior to the 24-month period
terminating on the date of such Notice ("Old Shares"), the price at which the
Corporation shall repurchase such Old Shares as are covered by the Repurchase
Notice shall be the Market Price thereof on the date of the Repurchase
Notice.
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(iii) The Corporation shall have the option in its sole discretion
of designating which of the Securities beneficially owned by any person
referred to in clause (i) or (ii) of paragraph (iv)(A) hereof are subject to
the Repurchase Notice and, for purposes hereof, it shall be sufficient for
the Corporation to indicate generally that Securities shall be repurchased
based on the order in which they were purchased or based on the reverse of
such order.
(iv) Any person to whom a Repurchase Notice is given pursuant to
the provisions of this Article shall have the burden of establishing to the
satisfaction of the Corporation the dates on which and prices at which such
person acquired the Securities subject to such Notice.
(D) For the purposes of this Article X:
(1) "Affiliate" or "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the rules and regulations under the
Exchange Act.
(2) "Gaming Authority" means any government, court, or federal,
state, local, international or foreign governmental, administrative or
regulatory and licensing body, agency, authority or official, which
regulates, has authority over, or otherwise asserts jurisdiction over gaming
activities (or proposed gaming activities), gaming operations or facilities
conducted by the Corporation or any of its subsidiaries or Affiliates, within
any gaming jurisdictions (domestic and foreign and the political subdivisions
thereof), whether now or hereafter existing, including without limitation,
the Nevada Gaming Control Board, the Nevada Gaming Commission, the Clark
County Liquor and Gaming Licensing Board, the New Jersey Casino Control
Commission, the Louisiana Gaming Control Board, the Mississippi Gaming
Commission and the Missouri Gaming Commission.
(3) "Gaming Law" means any federal, state, local, international or
foreign law, statute, order, ordinance or interpretation pursuant to which
any Gaming Authority possesses or asserts regulatory or licensing authority
over gaming activities, operations or facilities within any gaming
jurisdictions (domestic and foreign and the political subdivisions thereof),
and all rules and regulations promulgated by such Gaming Authority
thereunder, including, without limitation, the Nevada Gaming Control Act, the
Clark County Code, the New Jersey Casino Control Act, the Louisiana Riverboat
Economic Development and Gaming Control Act, the Mississippi Gaming Control
Act and the Missouri Gaming Law.
(4) "Market Price" means the average of the last sale prices of a
Security on the Composite Tape for New York Stock Exchange Listed Stocks for
each of the 15 consecutive trading days (the "Valuation Period") commencing
16 trading days prior to the date in question; provided that if such Security
is not quoted on the Composite Tape, such average last sale price shall be
derived from the average last sale prices on the New
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York Stock Exchange, or, if such Security is not listed on such exchange, on
the principal United States securities exchange registered under the Exchange
Act on which such Security is listed, or, if such Security is not listed on
any such exchange, the average of the closing bid quotations with respect to
such a Security during the Valuation Period on the Nasdaq National Market or
any system then in use, or if no such quotations are available, the fair
market value of such a Security on the date in question as determined by the
Board of Directors in good faith.
(5) A "person" means any individual, firm, corporation, limited
liability company, trust or other entity.
(6) A person shall be a "beneficial owner" of any Securities:
(i) which such person or any of its Affiliates or Associates
beneficially owns, directly or indirectly; or
(ii) which such person or any of its Affiliates or Associates
has (a) the right to acquire (whether such right is exercisable immediately
or only after the passage of time), pursuant to any agreement, arrangement or
understanding or upon the exercise of conversion rights, exchange rights,
warrants or options, or otherwise, or (b) the right to vote pursuant to any
agreement, arrangement or understanding; or
(iii) which are beneficially owned, directly or indirectly, by
any other Person with which such person or any of its Affiliates or
Associates has any agreement, arrangement or understanding for the purpose of
acquiring, holding, voting or disposing of any Securities.
(7) "Purchase Price" means the price paid to acquire a share of
Securities, exclusive of commissions, taxes and other fees and expenses,
adjusted for any stock split, stock dividend, combination of shares or
similar event.
(8) "Securities" means any shares of capital stock, bonds, notes,
convertible debentures, warrants or other instruments that represent a share
in the Corporation or a debt owed by the Corporation.
(E) A majority of the Whole Board shall have the power and duty to
determine for the purposes of this Article X on the basis of information
known to them after reasonable inquiry, whether clause (i) or (ii) of
paragraph (A) hereof applies to any person who beneficially owns Securities
of the Corporation such that the Corporation shall have the right to
repurchase shares of Securities held by such person or require the
disposition of such person's interest in the Corporation pursuant to this
ArticleX.
ARTICLE XI.
SECTION 11.1. ELIMINATION OF CERTAIN LIABILITY OF DIRECTORS.
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To the fullest extent permitted by the DGCL, as the same exists or may
hereafter be amended, no Director of the Corporation shall be personally
liable to the Corporation or its stockholders for monetary damages for breach
of fiduciary duty as a Director. No amendment of this Certificate of
Incorporation or repeal of any of its provisions shall limit or eliminate any
right or protection of a Director of this Corporation under this Section 11.1
for or with respect to any acts or omissions of such Director occurring prior
to such amendment or repeal.
Section 11.2. INDEMNIFICATION.
The Corporation shall indemnify (A) its Directors and officers, whether
serving the Corporation or at its request, any other entity, to the full
extent required or permitted by the DGCL now or hereafter in force, including
the advance of expenses under the procedures and to the full extent permitted
by law and (B) other employees and agents to such extent as shall be
expressly authorized by the Board of Directors or the By-Laws and as
permitted by law. The foregoing rights of indemnification shall not be
exclusive of any other rights to which those seeking indemnification may be
entitled. The Board of Directors may take such action as is necessary to
carry out these indemnification provisions and is expressly empowered to
adopt, approve and amend from time to time such by-laws, resolutions or
contracts implementing such provisions or such further indemnification
arrangements as may be permitted by law. No amendment of this Certificate of
Incorporation or repeal of any of its provisions shall limit or eliminate the
right to indemnification provided under this Section 11.2 with respect to any
acts or omissions occurring prior to such amendment or repeal.
ARTICLE XII.
Subject to the following sentence and applicable Gaming Laws, the
Corporation reserves the right at any time and from time to time to amend,
alter, change or repeal any provision contained in this Certificate of
Incorporation or the By-Laws, and other provisions authorized by the laws of
the State of Delaware at the time in force may be added or inserted, in the
manner now or hereafter prescribed by law; and all rights, preferences and
privileges of whatsoever nature conferred upon stockholders, directors or any
other persons whomsoever by and pursuant to this Certificate of Incorporation
in its present form or as hereafter amended are granted subject to the right
reserved in this Article. Notwithstanding anything contained in this
Certificate of Incorporation to the contrary, the affirmative vote of the
holders of at least 75% of the voting power of all the then outstanding
shares of the Corporation entitled to vote generally in the election of
Directors, voting together as a single class, shall be required to alter,
amend or repeal any provision under Article VI, VII, VIII, IX, XI or XII
contained in this Certificate of Incorporation.
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IT IS HEREBY CERTIFIED that the foregoing Amended and Restated
Certificate of Incorporation, which restates and further amends the
Certificate of Incorporation of Park Place Entertainment Corporation, was
adopted by the Board of Directors of Park Place Entertainment Corporation in
a resolution and declaring its advisability, in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware (the "DGCL") and by written consent of its sole stockholder in
accordance with Section 228 of the DGCL.
IN WITNESS WHEREOF, Park Place Entertainment Corporation has caused this
Amended and Restated Certificate of Incorporation to be signed by its
Executive Vice President - Law and Corporate Affairs on this 15th day of
December, 1998.
Park Place Entertainment Corporation
By: /s/ Clive S. Cummis
-----------------------------------
Name: Clive S. Cummis
Title: Executive Vice President -
Law and Corporate Affairs
and Secretary
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EXHIBIT 4.2
AMENDED AND RESTATED BY-LAWS
of
PARK PLACE ENTERTAINMENT CORPORATION
ARTICLE I.
OFFICES AND RECORDS
SECTION 1.1. DELAWARE OFFICE. The principal office of Park Place
Entertainment Corporation (the "Corporation") in the State of Delaware shall
be located in the City of Wilmington, County of New Castle, and the name and
address of its registered agent is Corporation Service Company, 1013 Centre
Road, Wilmington, Delaware.
SECTION 1.2. OTHER OFFICES. The Corporation may have such other
offices, either within or without the State of Delaware, as the Board of
Directors may designate or as the business of the Corporation may from time
to time require.
SECTION 1.3. BOOKS AND RECORDS. The books and records of the
Corporation may be kept outside the State of Delaware at such place or places
as may from time to time be designated by the Board of Directors.
ARTICLE II.
STOCKHOLDERS
SECTION 2.1 ANNUAL MEETING. The annual meeting of the stockholders of
the Corporation shall be held on such date and at such place and time as may
be fixed by resolution of the Board of Directors.
SECTION 2.2 SPECIAL MEETING. Subject to the rights of the holders of
any class or series of preferred stock, par value $.01 per share, of the
Corporation (any such stock being referred to herein as, the "Preferred
Stock"), special meetings of the stockholders of the Corporation may be
called only by the Chairman of the Board or by the Board of Directors
pursuant to a resolution adopted by a majority of the total number of
directors which the Corporation would have if there were no vacancies (the
"Whole Board").
SECTION 2.3 PLACE OF MEETING. The Board of Directors or the Chairman
of the Board, as the case may be, may designate the place of meeting for any
annual meeting or for any special meeting of the stockholders called by the
Board of Directors or the Chairman of the Board. If no designation is so
made, the place of meeting shall be the principal office of the Corporation.
<PAGE>
SECTION 2.4 NOTICE OF MEETING.
(A) Written or printed notice, stating the place, day and hour of the
meeting and the purpose or purposes for which the meeting is called, shall be
delivered by the Corporation not less than 10 days nor more than 60 days
before the date of the meeting, either personally or by mail, to each
stockholder of record entitled to vote at such meeting. If mailed, such
notice shall be deemed to be delivered when deposited in the United States
mail with postage thereon prepaid, addressed to the stockholder at his
address as it appears on the stock books of the Corporation. Such further
notice shall be given as may be required by law. Only such business shall be
conducted at a special meeting of stockholders as shall have been brought
before the meeting pursuant to the Corporation's notice of meeting. Meetings
may be held without notice if all stockholders entitled to vote are present,
or if notice is waived by those not present in accordance with Section 7.4 of
these By-Laws. Any previously scheduled meeting of the stockholders may be
postponed, and (unless the Amended and Restated Certificate of Incorporation
of the Corporation (as amended from time to time, the "Certificate of
Incorporation") otherwise provides) any special meeting of the stockholders
may be canceled, by resolution of the Board of Directors upon public notice
given prior to the date previously scheduled for such meeting of
stockholders.
(B) A complete list of the stockholders entitled to vote at the ensuing
election arranged in alphabetical order, with the residence of each and the
number of voting shares held by each, shall be prepared by the Secretary and
filed in the office where the election is to be held, at least ten days
before every election, and shall at all times be open to the examination of
any stockholder during the usual hours for business for a purpose germane to
the meeting and during the whole time of said election.
SECTION 2.5 QUORUM AND ADJOURNMENT. Except as otherwise provided by
law or by the Certificate of Incorporation, the holders of a majority of the
outstanding shares of the Corporation entitled to vote generally in the
election of directors (the "Voting Stock"), represented in person or by
proxy, shall constitute a quorum at a meeting of stockholders, except that
when specified business is to be voted on by a class or series of stock
voting as a class, the holders of a majority of the shares of such class or
series shall constitute a quorum of such class or series for the transaction
of such business. The Chairman of the meeting may adjourn the meeting from
time to time, whether or not there is such a quorum. No notice of the time
and place of adjourned meetings need be given except as required by law. The
stockholders present at a duly called meeting at which a quorum is present
may continue to transact business until adjournment, notwithstanding the
withdrawal of enough stockholders to leave less than a quorum.
SECTION 2.6 PROXIES. At all meetings of stockholders, a stockholder
may vote by proxy executed in writing (or in such manner prescribed by the
General Corporation Law of the State of Delaware (the "DGCL")) by the
stockholder, or by his duly authorized attorney in fact.
SECTION 2.7 Notice of Stockholder Business and Nominations.
(A) ANNUAL MEETINGS OF STOCKHOLDERS.
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(1) Nominations of persons for election to the Board of Directors
of the Corporation and the proposal of business to be considered by the
stockholders may be made at an annual meeting of stockholders (a) pursuant to
the Corporation's notice of meeting (or any supplement thereto), (b) by or at
the direction of a majority of the Whole Board or (c) by any stockholder of
the Corporation who was a stockholder of record at the time the notice
provided for in this By-Law is delivered to the Secretary of the Corporation,
who is entitled to vote at the meeting and who complies with the notice
procedures set forth in this By-Law.
(2) For nominations or other business to be properly brought before
an annual meeting by a stockholder pursuant to clause (c) of paragraph (A)(1)
of this By-Law, the stockholder must have given timely notice thereof in
writing to the Secretary of the Corporation and such other business must
otherwise be a proper matter for stockholder action. To be timely, a
stockholder's notice shall be delivered to the Secretary at the principal
executive offices of the Corporation not later than the close of business on
the 70th day nor earlier than the close of business on the 90th day prior to
the first anniversary of the preceding year's annual meeting; PROVIDED,
HOWEVER, that in the event that the date of the annual meeting is more than
30 days before or more than 60 days after such anniversary date, notice by
the stockholder to be timely must be so delivered not earlier than the close
of business on the 90th day prior to such annual meeting and not later than
the close of business on the later of the 70th day prior to such annual
meeting or the 10th day following the day on which public announcement of the
date of such meeting is first made by the Corporation. In no event shall the
public announcement of an adjournment of an annual meeting commence a new
time period for the giving of a stockholder's notice as described above.
Such stockholder's notice shall set forth (a) as to each person whom the
stockholder proposes to nominate for election or re-election as a director
all information relating to such person that is required to be disclosed in
solicitations of proxies for election of directors in an election contest, or
is otherwise required, in each case pursuant to Regulation 14A under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), including,
but not limited to, information required to be disclosed by Items 4(b) and 6
of Schedule 14A under the Exchange Act and information which would be
required to be filed on Schedule 14B under the Exchange Act, and Rule 14a-11
thereunder (including such person's written consent to being named in the
proxy statement as a nominee and to serving as a director if elected); (b) as
to any other business that the stockholder proposes to bring before the
meeting, a brief description of the business desired to be brought before the
meeting, the reasons for conducting such business at the meeting and any
material interest in such business of such stockholder and the beneficial
owner, if any, on whose behalf the proposal is made; and (c) as to the
stockholder giving the notice and the beneficial owner, if any, on whose
behalf the nomination or proposal is made (i) the name and address, as they
appear on the Corporation's books, of such stockholder and any other
stockholders known by such stockholder to be supporting such nominees or
proposal, and of such beneficial owner, (ii) the class and number of shares
of the Corporation which are owned beneficially and of record by such
stockholder and, to the extent known, by any other stockholders known by such
stockholder to be supportng such nominees or proposal, and syuch beneficial
owner, (iii) arepresentaiton that the stockholder is a holder of record of
stock of the Coproation entitled to vote at such meeting and intends to
appear in person or by proxy at the meeting to propose such business or
nomination, and (iv) a representation whether the stockholder or the
beneficial owner, if any, intends or is part of a group which intends to (a)
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deliver a proxy statement and form of proxy to holders of at least the
percentage of the Corporation's outstanding common stock required to approve
or adopt the proposal or elect the nominee and/or (b) otherwise solicit
proxies from stockholders in support of such proposal or nomination.
(3) Notwithstanding anything in the second sentence of paragraph
(A)(2) of this By-Law to the contrary, in the event that the number of
directors to be elected to the Board of Directors of the Corporation is
increased and there is no public announcement by the Corporation naming all
of the nominees for director or specifying the size of the increased Board of
Directors at least 70 days prior to the first anniversary of the preceding
year's annual meeting, a stockholder's notice required by this By-Law shall
also be considered timely, but only with respect to nominees for any new
positions created by such increase, if it shall be delivered to the Secretary
at the principal executive offices of the Corporation not later than the
close of business on the 10th day following the day on which such public
announcement is first made by the Corporation.
(B) SPECIAL MEETINGS OF STOCKHOLDERS. Only such business shall be
conducted at a special meeting of stockholders as shall have been brought
before the meeting pursuant to the Corporation's notice of meeting.
Nominations of persons for election to the Board of Directors may be made at
a special meeting of stockholders at which directors are to be elected
pursuant to the Corporation's notice of meeting (a) by or at the direction of
the Board of Directors or (b) provided that the Board of Directors has
determined that directors shall be elected at such meeting, by any
stockholder of the Corporation who is a stockholder of record at the time of
giving of notice provided for in this By-Law, who shall be entitled to vote
at the meeting and who complies with the notice procedures set forth in this
By-Law. In the event the Corporation calls a special meeting of stockholders
for the purpose of electing one or more directors to the Board of Directors,
any such stockholder may nominate a person or persons (as the case may be),
for election to such position(s) as specified in the Corporation's notice of
meeting, if the stockholder's notice required by paragraph (A)(2) of this
By-Law shall be delivered to the Secretary at the principal executive offices
of the Corporation not earlier than the close of business on the 90th day
prior to such special meeting and not later than the close of business on the
later of the 70th day prior to such special meeting or the 10th day following
the day on which public announcement is first made of the date of the special
meeting and of the nominees proposed by the Board of Directors to be elected
at such meeting. In no event shall the public announcement of an adjournment
of a special meeting commence a new time period for the giving of a
stockholder's notice as described above.
(C) GENERAL.
(1) Only such persons who are nominated in accordance with the
procedures set forth in this By-Law shall be eligible to be elected at an
annual or special meeting of stockholders of the Corporation to serve as
directors and only such business shall be conducted at a meeting of
stockholders as shall have been brought before the meeting in accordance with
the procedures set forth in this By-Law. Except as otherwise provided by
law, the Chairman of the meeting shall have the exclusive power and duty to
(i) determine whether a nomination or any
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business proposed to be brought before the meeting was made or proposed, as
the case may be, in accordance with the procedures set forth in this By-Law
and (ii) if any proposed nomination or business is not in compliance with
this By-Law, including if the stockholder solicits or is part of a group
which solicits proxies in support of such stockholder's proposal without such
stockholder having made the representation required by either clause (c)(iii)
or (c)(iv) of paragraph (A)(2) of this By-Law, to declare that such defective
proposal or nomination shall be disregarded or that such proposed business
shall not be transacted.
(2) For the purposes of this By-Law, "public announcement" shall
mean disclosure in a press re lease reported by the Dow Jones News Service,
Associated Press or comparable national news service or in a document
publicly filed by the Corporation with the Securities and Exchange Commission
pursuant to Section 13, 14 or 15(d) of the Exchange Act.
(3) Notwithstanding the foregoing provisions of this By-Law, a
stockholder shall also comply with all applicable requirements of the
Exchange Act and the rules and regulations thereunder with respect to the
matters set forth in this By-Law. Nothing in this By-Law shall be deemed to
affect any rights (i) of stockholders to request inclusion of proposals in
the Corporation's proxy statement pursuant to Rule 14a-8 under the Exchange
Act or (ii) of the holders of any series of Preferred Stock to elect
directors under specified circumstances.
SECTION 2.8 PROCEDURE FOR ELECTION OF DIRECTORS; REQUIRED VOTE.
Election of directors at all meetings of the stockholders at which directors
are to be elected shall be by ballot, and, subject to the rights of the
holders of any series of Preferred Stock to elect directors under specified
circumstances, a plurality of the votes cast thereat shall elect directors.
Except as otherwise provided by law, the Certificate of Incorporation, or
these By-Laws, in all matters other than the election of directors, the
affirmative vote of a majority of the shares present in person or represented
by proxy at the meeting and entitled to vote on the matter shall be the act
of the stockholders.
SECTION 2.9 INSPECTORS OF ELECTIONS; OPENING AND CLOSING THE POLLS.
The Board of Directors by resolution shall appoint one or more inspectors,
which inspector or inspectors may include individuals who serve the
Corporation in other capacities, including, without limitation, as officers,
employees, agents or representatives, to act at the meetings of stockholders
and make a written report thereof. One or more persons may be designated as
alternate inspectors to replace any inspector who fails to act. If no
inspector or alternate has been appointed to act, or if any such inspector or
alternate fails to attend or is unable to act at a meeting of stockholders,
then the Chairman of the meeting shall appoint one or more inspectors to act
at the meeting. Each inspector, before discharging his or her duties, shall
take and sign an oath faithfully to execute the duties of inspector with
strict impartiality and according to the best of his or her ability. The
inspectors shall have the duties prescribed by law.
The Chairman of the meeting shall fix and announce at the meeting the
date and time of the opening and the closing of the polls for each matter
upon which the stockholders will vote at a meeting.
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SECTION 2.10 NO STOCKHOLDER ACTION BY WRITTEN CONSENT. Subject to the
rights of the holders of any series of Preferred Stock, any action required
or permitted to be taken by the stockholders of the Corporation must be
effected at a duly called annual or special meeting of such holders and may
not be effected by any consent in writing by such holders.
ARTICLE III
BOARD OF DIRECTORS
SECTION 3.1 GENERAL POWERS. The business and affairs of the
Corporation shall be managed under the direction of the Board of Directors.
In addition to the powers and authorities by these By-Laws expressly
conferred upon them, the Board of Directors may exercise all such powers of
the Corporation and do all such lawful acts and things as are not by statute
or by the Certificate of Incorporation or by these By-Laws required to be
exercised or done by the stockholders.
SECTION 3.2 NUMBER, TENURE AND QUALIFICATIONS. Subject to the rights
of the holders of any series of Preferred Stock to elect directors under
specified circumstances, the number of directors of the Corporation which
shall constitute the entire board shall be fixed from time to time as
provided in the Certificate of Incorporation. Directors need not be
stockholders. The directors, other than those who may be elected by the
holders of any series of Preferred Stock under specified circumstances, shall
be divided, with respect to the time for which they severally hold office,
into three classes, as nearly equal in number as is reasonably possible, with
the term of office of the first class to expire at the 2000 annual meeting of
stockholders, the term of office of the second class to expire at the 2001
annual meeting of stockholders and the term of office of the third class to
expire at the 2002 annual meeting of stockholders, with each director to hold
office until his or her successor shall have been duly elected and qualified.
At each annual meeting of stockholders, commencing with the 2000 annual
meeting, (i) directors elected to succeed those directors whose terms then
expire shall be elected for a term of office to expire at the third
succeeding annual meeting of stockholders after their election, with each
director to hold office, subject to any qualifications or approvals required
under any Gaming Laws (as hereinafter defined in Section 7.7(C)), until his
or her successor shall have been duly elected and qualified, and (ii) if
authorized by a resolution of the Board of Directors, directors may be
elected to fill any vacancy on the Board of Directors, regardless of how such
vacancy shall have been created. For purposes of these By-Laws, an
individual shall be qualified to serve as a director only for so long as such
individual is determined to be and continues to be, qualified by all
applicable Gaming Authorities (as hereinafter defined in Section 7.7(B)) and
under all applicable Gaming Laws, as required, and in the event such
individual does not continue to be so qualified, such individual shall be
disqualified and shall cease to be a director of the Corporation.
SECTION 3.3 REGULAR MEETINGS. A regular meeting of the Board of
Directors shall be held without other notice than this By-Law immediately
after, and at the same place as, the Annual Meeting of Stockholders. The
Board of Directors may, by resolution, provide the time and place for the
holding of additional regular meetings without other notice than such
resolution.
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SECTION 3.4 SPECIAL MEETINGS. Special meetings of the Board of
Directors may be called at the request of the Chairman of the Board, the
President or a majority of the Board of Directors then in office. The person
or persons authorized to call special meetings of the Board of Directors may
fix the place and time of the meetings.
SECTION 3.5 NOTICE. Notice of any special meeting of directors shall
be given to each director at his business or residence in writing by hand
delivery, first class or overnight mail or courier service, telegram or
facsimile transmission, or orally by telephone. If mailed by first-class
mail, such notice shall be deemed adequately delivered when deposited in the
United States mails so addressed, with postage thereon prepaid, at least five
days before such meeting. If by telegram, overnight mail or courier service,
such notice shall be deemed adequately delivered when the telegram is
delivered to the telegraph company or the notice is delivered to the
overnight mail or courier service company at least 24 hours before such
meeting. If by facsimile transmission, such notice shall be deemed
adequately delivered when the notice is transmitted at least 12 hours before
such meeting. If by telephone or by hand delivery, the notice shall be given
at least 12 hours prior to the time set for the meeting. Neither the
business to be transacted at, nor the purpose of, any regular or special
meeting of the Board of Directors need be specified in the notice of such
meeting, except for amendments to these By-Laws, as provided under Section
9.1. A meeting may be held at any time without notice if all the directors
are present or if those not present waive notice of the meeting in accordance
with Section 7.4 of these By-Laws.
SECTION 3.6 ACTION BY CONSENT OF BOARD OF DIRECTORS. Any action
required or permitted to be taken at any meeting of the Board of Directors or
of any committee thereof may be taken without a meeting if all members of the
Board or committee, as the case may be, consent thereto in writing, and the
writing or writings are filed with the minutes of proceedings of the Board or
committee, as applicable.
SECTION 3.7 CONFERENCE TELEPHONIC MEETINGS. Members of the Board of
Directors, or any committee thereof, may participate in a meeting of the
Board of Directors or such committee by means of conference telephone or
similar communications equipment by means of which all persons participating
in the meeting can hear each other, and such participation in a meeting shall
constitute presence in person at such meeting.
SECTION 3.8 QUORUM. Subject to Section 3.9, a whole number of
directors equal to at least a majority of the Whole Board shall constitute a
quorum for the transaction of business, but if at any meeting of the Board of
Directors there shall be less than a quorum present, a majority of the
directors present may adjourn the meeting from time to time without further
notice. Except as otherwise provided in the Certificate of Incorporation or
in these By-Laws, the act of the majority of the directors present at a
meeting at which a quorum is present shall be the act of the Board of
Directors. The directors present at a duly organized meeting may continue to
transact business until adjournment, notwithstanding the withdrawal of enough
directors to leave less than a quorum.
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SECTION 3.9 VACANCIES AND NEWLY CREATED DIRECTORSHIPS. Except as
otherwise provided in the Certificate of Incorporation and subject to
applicable law and the rights of the holders of any series of Preferred
Stock, and unless the Board of Directors otherwise determines, vacancies
resulting from death, resignation, retirement, disqualification, removal from
office or other cause, and newly created directorships resulting from any
increase in the authorized number of directors, may be filled only by the
affirmative vote of a majority of the remaining directors, though less than a
quorum of the Board of Directors. Subject to the obtaining of approval by
any Gaming Authority required before such person can become, or serve as, a
director, any director so chosen pursuant to the foregoing sentence shall
hold office for the remainder of the full term expiring at the annual meeting
of stockholders at which the term of office of the class to which they have
been elected expires and until such director's successor shall have been duly
elected and qualified. No decrease in the number of authorized directors
constituting the Board of Directors shall shorten the term of any incumbent
director.
SECTION 3.10 EXECUTIVE AND OTHER COMMITTEES. The Board of Directors
may, by resolution adopted by a majority of the Whole Board in favor thereof,
designate an Executive Committee to exercise, subject to applicable
provisions of law, all the powers of the Board in the management of the
business and affairs of the Corporation when the Board is not in session,
including without limitation the power to declare dividends, to authorize the
issuance of the Corporation's capital stock and to adopt a certificate of
ownership and merger pursuant to Section 253 of the DGCL, and may, by
resolution similarly adopted, designate one or more other committees. The
Executive Committee and each such other committee shall consist of two or
more directors of the Corporation. The Board may designate one or more
directors as alternate members of any committee, who may replace any absent
or disqualified member at any meeting of the committee. Any such committee,
other than the Executive Committee (the powers of which are expressly
provided for herein), may to the extent permitted by law exercise such powers
and shall have such responsibilities as shall be specified in the designating
resolution. In the absence or disqualification of any member of such
committee or committees, the member or members thereof present at any meeting
and not disqualified from voting, whether or not constituting a quorum, may
unanimously appoint another member of the Board of Directors to act at the
meeting in the place of any such absent or disqualified member. Each
committee shall keep written minutes of its proceedings and shall report such
proceedings to the Board when required.
A majority of any committee may determine its action and fix the time
and place of its meetings, unless the Board of Directors shall otherwise
provide. Notice of such meetings shall be given to each member of the
committee in the manner provided for in Section 3.5 of these By-Laws. The
Board shall have power at any time to fill vacancies in, to change the
membership of, or to dissolve any such committee. Nothing herein shall be
deemed to prevent the Board of Directors from appointing one or more
committees consisting in whole or in part of persons who are not directors of
the Corporation; provided, however, that no such committee shall have or may
exercise any authority of the Board.
SECTION 3.11 REMOVAL. Subject to the rights of the holders of any
series of Preferred Stock to elect directors under specified circumstances,
any director may be removed from office,
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but only "for cause," and only by the affirmative vote of the holders of at
least 75% of the voting power of all the then outstanding shares of Voting
Stock, voting together as a single class. For the purposes of this Section
3.11, "for cause" shall mean (i) the willful and continuous failure of a
director to substantially perform or observe his or her duties to the
Corporation (other than any such failure resulting from physical or mental
incapacity of such director) or (ii) the willful engagement by a director in
gross misconduct which is materially and demonstrably injurious to the
Corporation.
SECTION 3.12 RECORDS. The Board of Directors shall cause to be kept a
record containing the minutes of the proceedings of the meetings of the Board
and of the stockholders, appropriate stock books and registers and such books
of records and accounts as may be necessary for the proper conduct of the
business of the Corporation.
SECTION 3.13 COMPENSATION OF DIRECTORS. Each director who is not also
an officer of the Corporation shall receive such stated annual stipend and
such allowance for attendance at each regular or special meeting of the Board
or any special or standing committee as shall be fixed from time to time by
resolution of the Board of Directors, and the expenses of attendance at any
such meeting by each director shall be borne by the Corporation.
SECTION 3.14 INTERESTED DIRECTORS. No contract or transaction between
the Corporation and one or more of its directors or officers, or between the
Corporation and any other corporation, partnership, association, or other
organization in which one or more of its directors or officers are directors
or officers, or have a financial interest, shall be void or voidable solely
for this reason, or solely because the director or officer is present at or
participates in the meeting of the Board of Directors or committee thereof
which authorizes the contract or transaction, or solely because his or their
votes are counted for such purpose if: (i) the material facts as to his or
their relationship or interest and as to the contract or transaction are
disclosed or are known to the Board of Directors or the committee, and the
Board of Directors or committee in good faith authorizes the contract or
transaction by the affirmative votes of a majority of the disinterested
Directors, even though the disinterested Directors be less than a quorum; or
(ii) the material facts as to his or their relationship or interest and as to
the contract or transaction are disclosed or are known to the stockholders
entitled to vote thereon, and the contract or transaction is specifically
approved in good faith by vote of the stockholders; or (iii) the contract or
transaction is fair as to the Corporation as of the time it is authorized,
approved or ratified, by the Board of Directors, a committee thereof or the
stockholders. Common or interested directors may be counted in determining
the presence of a quorum at a meeting of the Board of Directors or of a
committee which authorizes the contract or transaction.
ARTICLE IV
OFFICERS
SECTION 4.1 ELECTED OFFICERS. The elected officers of the Corporation
shall be a Chairman of the Board, a President, one or more Executive Vice
Presidents, one or more Senior Vice Presidents, one or more Vice Presidents,
a Secretary, a Treasurer, and such other officers
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(including, without limitation, a Chief Financial Officer) or agents to hold
such offices, with such titles, for such period and have such authority and
perform such duties as the Board of Directors may provide by resolution from
time to time. The Chairman of the Board shall be chosen from among the
directors. All officers shall each have such powers and duties as generally
pertain to their respective offices, subject to the specific provisions of
this Article IV. Such officers shall also have such powers and duties as
from time to time may be conferred by the Board of Directors or by any
committee thereof. The Board or any committee thereof may from time to time
elect, or the Chairman of the Board or President may appoint, such other
officers (including one or more Assistant Vice Presidents, Assistant
Secretaries, Assistant Treasurers, and Assistant Controllers) and such
agents, as may be necessary or desirable for the conduct of the business of
the Corporation. Such other officers and agents shall have such duties and
shall hold their offices for such terms as shall be provided in these By-Laws
or as may be prescribed by the Board or such committee or by the Chairman of
the Board or President, as the case may be.
SECTION 4.2 ELECTION AND TERM OF OFFICE. The elected officers of the
Corporation shall be elected annually by the Board of Directors at the
regular meeting of the Board of Directors held after the annual meeting of
the stockholders. If the election of officers shall not be held at such
meeting, such election shall be held as soon thereafter as convenient.
Subject to the obtaining of any Gaming Authority approval required before
such person can become, or serve as, an officer, each officer shall hold
office until his successor shall have been duly elected and shall have
qualified or until his death or until he shall resign. Any officer may be
removed from office at any time by the affirmative vote of a majority of the
Whole Board. Such removal shall be without prejudice to the contractual
rights, if any, of the person so removed.
SECTION 4.3 CHAIRMAN OF THE BOARD. The Chairman of the Board shall
preside at all meetings of the Board of Directors and the stockholders. In
the absence or incapacity of the Chairman of the Board, the President shall
preside at all meetings of the Board of Directors and the stockholders.
SECTION 4.4 PRESIDENT. The President shall be the Chief Executive
Officer of the Corporation. Subject to the authority of the Board of
Directors, the President shall be responsible for the general management of
the business of the Corporation and shall be responsible for implementing the
policies and programs of the Board of Directors. The President shall have
the power to appoint such agents and employees as in the President's judgment
may be necessary or proper for the transaction of the business of the
Corporation, and shall determine their duties and recommend their
compensation. The President shall execute bonds, mortgages and other
contracts requiring a seal, under the seal of the Corporation, except where
required by law to be otherwise signed and executed and except where the
signing and execution thereof shall be expressly delegated by the Board of
Directors to some other officer or agent of the Corporation. The President
shall report to the Board of Directors through the Chairman of the Board.
The President shall, in the absence of or incapacity of the Chairman of the
Board, perform all duties of the Chairman of the Board and preside at all
meetings of the Board of Directors and the stockholders.
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SECTION 4.5 EXECUTIVE VICE PRESIDENTS AND SENIOR VICE PRESIDENTS. The
Executive Vice Presidents and the Senior Vice Presidents shall perform such
duties as may be delegated or prescribed by the President, the Board of
Directors or the Executive Committee of the Corporation.
SECTION 4.6 VICE PRESIDENTS. Each Vice President shall have such
powers and shall perform such duties as are from time to time presented by
the Board of Directors or Executive Committee or as delegated by the
President.
SECTION 4.7 CHIEF FINANCIAL OFFICER. The Chief Financial Officer (if
any) shall be an Executive Vice President, a Senior Vice President or a Vice
President and act in an executive financial capacity. He shall assist the
Chairman of the Board and the President in the general supervision of the
Corporation's financial policies and affairs.
SECTION 4.8 TREASURER AND ASSISTANT TREASURERS. The Treasurer shall
have the custody of the corporate funds and securities and shall keep full
and accurate accounts of receipts and disbursements in books belonging to the
Corporation and shall deposit all monies and other valuable effects in the
name and to the credit of the Corporation in such depositories as may be
designated by the Board of Directors. The Treasurer shall disburse the funds
of the Corporation as may be ordered by the Board, taking proper vouchers for
such disbursements, and shall render to the President and Directors, at
regular meetings of the Board, or whenever they may require an account of all
the Treasurer's transactions as Treasurer and of the financial condition of
the Corporation. If required by the Board of Directors, the Treasurer shall
give the Corporation a bond (which shall be renewed every six years) in such
sum and with such surety or sureties as shall be satisfactory to the Board
for the faithful performance of the duties of this office and for the
restoration to the Corporation, in case of the Treasurer's death,
resignation, retirement or removal from office, of all books, papers,
vouchers, money and other property of whatever kind in the Treasurer's
possession or under the Treasurer's control belonging to the Corporation.
The Assistant Treasurers in the order of their seniority shall, in the
absence or disability of the Treasurer, perform the duties and exercise the
powers of the Treasurer and shall perform such other duties as the Board of
Directors shall prescribe.
SECTION 4.9 SECRETARY AND ASSISTANT SECRETARIES. The Secretary shall
attend all sessions of the Board and all meetings of the stockholders and
record all votes and the minutes of all proceedings in a book to be kept for
that purpose and shall perform like duties for the standing committees when
required. The Secretary shall give, or cause to be given, notice of all
meetings of the stockholders and special meetings of the Board of Directors,
and shall perform such other duties as may be prescribed by the Board of
Directors, the Chairman of the Board or President, who shall supervise the
Secretary. The Secretary shall keep in safe custody the seal of the
Corporation and, when authorized by the Board, affix the same to any
instrument requiring it and, when so affixed, it shall be attested by the
Secretary's signature or by the signature of the Treasurer or the Assistant
Corporate Secretary or any Assistant Secretary.
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The Assistant Corporate Secretary, or the Assistant Secretaries in order
of their seniority, shall, in the absence or disability of the Secretary,
perform the duties and exercise the powers of the Secretary and shall perform
such other duties as the Board of Directors shall prescribe.
SECTION 4.10 REMOVAL. Any officer elected, or agent appointed, by the
Board of Directors, or any officer or agent appointed by the Chairman of the
Board or the President, may be removed by the affirmative vote of a majority
of the Whole Board whenever, in their judgment, the best interests of the
Corporation would be served thereby. Any officer or agent appointed by the
Chairman of the Board or the President may be removed by him whenever, in his
judgment, the best interests of the Corporation would be served thereby. No
elected officer shall have any contractual rights against the Corporation for
compensation by virtue of such election beyond the date of the election of
his successor, his death, his resignation or his removal, whichever event
shall first occur, except as otherwise provided in an employment contract or
under an employee deferred compensation plan.
SECTION 4.11 VACANCIES. A newly created elected office and a vacancy
in any elected office because of death, resignation, or removal may be filled
by the Board of Directors for the unexpired portion of the term at any
meeting of the Board of Directors. Any vacancy in an office appointed by the
Chairman of the Board or the President because of death, resignation, or
removal may be filled by the Chairman of the Board or the President. To the
extent that any prior approval is required by any Gaming Authority or under
any Gaming Law to fill a newly created elected office or a vacancy in any
elected office, such approval shall be obtained prior to filling any such
office or vacancy.
ARTICLE V
STOCK CERTIFICATES AND TRANSFERS
SECTION 5.1 STOCK CERTIFICATES AND TRANSFERS. The interest of each
stockholder of the Corporation shall be evidenced by certificates for shares
of stock or shall be uncertificated. Absent specific request for such a
certificate by the registered owner or transferee thereof, all shares shall
be uncertificated upon the original issuance thereof by the Corporation or
upon the surrender for transfer of the certificate representing such shares
to the Corporation or its transfer agent. The shares of the stock of the
Corporation shall be transferred on the books of the Corporation by the
holder thereof in person or by his attorney, if applicable, upon surrender
for cancellation of certificates for at least the same number of shares, with
an assignment and power of transfer endorsed thereon or attached thereto,
duly executed, with such proof of the authenticity of the signature as the
Corporation or its agents may reasonably require. Except as otherwise
provided herein, all certificates surrendered to the Corporation for transfer
shall be canceled and no new certificates or uncertificated shares shall be
issued until such former certificates have been surrendered and canceled.
Upon surrender to the Corporation or the transfer agent of the Corporation of
a certificate for shares duly endorsed or accompanied by proper evidence of
succession, assignment or authority to transfer, it shall be the duty of the
Corporation to issue a new certificate to the person entitled thereto (and
upon specific request by such person), cancel the old certificate and record
the transaction upon its books.
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The certificate for shares of stock of the Corporation shall be in such
form, not inconsistent with the Certificate of Incorporation, as the
appropriate officers of the Corporation may from time to time prescribe. The
certificates of stock shall be signed, countersigned and registered in such
manner as the Board of Directors may by resolution prescribe, which
resolution may permit all or any of the signatures on such certificates to be
in facsimile. In case any officer, transfer agent or registrar who has
signed or whose facsimile signature has been placed upon a certificate has
ceased to be such officer, transfer agent or registrar of the Corporation,
whether because of death, resignation, or otherwise, before such certificate
or certificates shall have been delivered by the Corporation, such
certificate or certificates may nevertheless be issued and delivered with the
same effect as if such person or persons were such officer, transfer agent or
registrar of the Corporation at the date of issue.
All certificates for shares of stock shall be consecutively numbered as
the same are issued. The name of the person owning the shares represented
thereby with the number of such shares and the date of issue thereof shall be
entered on the books of the Corporation.
SECTION 5.2 LOST, STOLEN OR DESTROYED CERTIFICATES. The Board of
Directors may direct new certificate(s) to be issued in place of any
certificate(s) theretofore issued by the Corporation alleged to have been
lost, destroyed or stolen, upon making of an affidavit of that fact by the
person claiming the certificate of stock to be lost, destroyed or stolen.
When authorizing such issue of a new certificate(s), the Board of Directors
may, in its discretion and as a condition precedent to the issuance thereof,
require the owner of such lost, destroyed or stolen certificate(s), or his or
her legal representative, to advertise the same in such manner as it shall
require and give the Corporation a bond in such sum as it may direct as
indemnity against any claim that may be made against the Corporation with
respect to the certificate(s) alleged to have been lost, destroyed or stolen.
ARTICLE VI
INDEMNIFICATION AND INSURANCE
SECTION 6.1 ACTION OTHER THAN BY OR IN THE RIGHT OF THE CORPORATION.
The Corporation shall indemnify and hold harmless, to the fullest extent
permitted by applicable law as it presently exists or may hereafter be
amended, an Agent (as hereinafter defined) against costs, charges and
Expenses (as hereinafter defined), judgments, fines and amounts paid in
settlement actually and reasonably incurred by an Agent in connection with an
action, suit or proceeding (of the type referenced in the definition of
"Agent"), and any appeal therefrom, if the Agent acted in good faith and in a
manner the Agent reasonably believed to be in or not opposed to the best
interests of the Corporation, and with respect to any criminal action or
proceeding, had no reasonable cause to believe such conduct was unlawful.
The termination of any action, suit or proceeding (whether by judgment,
order, settlement, conviction, or upon a plea of nolo contendere or its
equivalent) shall not, of itself, create a presumption that the Agent did not
act in good faith and in a manner which the Agent reasonably believed to be
in or not opposed to the best interests of the Corporation, and, with respect
to any criminal action or proceeding, that such person had reasonable cause
to believe that the Agent's conduct was unlawful.
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SECTION 6.2 ACTION BY OR IN THE RIGHT OF THE CORPORATION. The
Corporation shall indemnify any person who was or is a party or is threatened
to be made a party to any threatened, pending or completed judicial action or
suit brought by or in the right of the Corporation to procure a judgment in
its favor by reason of the fact that such person is or was an Agent, against
costs, charges and Expenses actually and reasonably incurred by an Agent in
connection with the defense or settlement of such action or suit and any
appeal therefrom if the Agent acted in good faith and in a manner such person
reasonably believed to be in or not opposed to the best interests of the
Corporation, except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable for gross negligence or willful misconduct in the performance of the
Agent's duty to the Corporation unless and only to the extent that the Court
of Chancery or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such costs, charges and Expenses which
the Court of Chancery or other such court shall deem proper.
SECTION 6.3 DETERMINATION OF RIGHT OF INDEMNIFICATION. Any
indemnification under Section 6.1 or 6.2 (unless ordered by a court) shall be
paid by the Corporation unless a determination is reasonably and promptly
made (i) by the Board of Directors by a majority vote of a quorum consisting
of Disinterested Directors, or (ii) if such a quorum is not obtainable, or,
even if obtainable, if a quorum of Disinterested Directors so directs, by
Independent Counsel in a written opinion, or (iii) by the stockholders, that
such person acted in bad faith and in a manner that such person did not
believe to be in or not opposed to the best interests of the Corporation, or,
with respect to any criminal proceeding, that such person believed or had
reasonable cause to believe that his conduct was unlawful.
SECTION 6.4 INDEMNIFICATION AGAINST EXPENSES OF SUCCESSFUL PARTY.
Notwithstanding the other provisions of this Article, to the extent that an
Agent has been successful on the merits or otherwise, including, without
limitation, the dismissal of an action without prejudice, the settlement of
an action without admission of liability, or the defense of any claim, issue
or matter therein, or on appeal from any such proceeding, action, claim or
matter, such Agent shall be indemnified against all costs, charges and
Expenses incurred in connection therewith.
SECTION 6.5 ADVANCES OF EXPENSES. Except as limited by Section 6.6,
costs, charges, and Expenses incurred by an Agent in any action, suit,
proceeding or investigation or any appeal therefrom shall be paid by the
Corporation in advance of the final disposition of such matter, if the Agent
shall undertake to repay such amount in the event that it is ultimately
determined, as provided herein, that such person is not entitled to
indemnification. Notwithstanding the foregoing, no advance shall be made by
the Corporation if a determination is reasonably and promptly made (i) by the
Board of Directors by a majority vote of a quorum of Disinterested Directors,
(ii) if such a quorum is not obtainable or, even if obtainable, a quorum of
Disinterested Directors so directs, by Independent Counsel in a written
opinion, that, based upon the facts known to the Board of Directors or
counsel at the time such determination is made, the Agent acted in bad faith
and in a manner that such person did not believe to be in the best
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interests of the Corporation, or (iii) with respect to any criminal
proceeding, that such person believed or had reasonable cause to believe his
or her conduct was unlawful. In no event shall any advance be made in
instances where the Board of Directors or Independent Counsel reasonably
determines that the Agent deliberately breached such person's duty to the
Corporation or its stockholders.
SECTION 6.6 RIGHT OF AGENT TO INDEMNIFICATION UPON APPLICATION;
PROCEDURE UPON APPLICATION. Any indemnification under Section 6.1, 6.2 or
6.4 or advance under Section 6.5, shall be made promptly, and in any event
within 60 days, upon the written request of the Agent, unless with respect to
applications under Section 6.1, 6.2 or 6.5, a determination is reasonably and
promptly made by the Board of Directors by a majority vote of a quorum of
Disinterested Directors that such Agent acted in a manner set forth in such
Sections as to justify the Corporation's not indemnifying or making an
advance to the Agent. In the event no quorum of Disinterested Directors is
obtainable, the Board of Directors shall promptly direct that Independent
Counsel shall decide whether the Agent acted in the manner set forth in such
Sections as to justify the Corporation's not indemnifying or making an
advance to the Agent. The right to indemnification or advances as granted by
this Article shall be enforceable by the Agent in any court of competent
jurisdiction, if the Board of Directors or Independent Counsel denies the
claim in whole or in part, or if no disposition of such claim is made within
60 days. The Agent's costs, charges and Expenses incurred in connection with
successfully establishing such person's right to indemnification, in whole or
in part, in any such proceeding shall also be indemnified by the Corporation.
SECTION 6.7 OTHER RIGHTS AND REMEDIES. The indemnification provided
by this Article shall not be deemed exclusive of, and shall not affect, any
other rights to which an Agent seeking indemnification may be entitled under
any law, By-Law, or charter provision, agreement, vote of stockholders or
Disinterested Directors or otherwise, both as to action in such person's
official capacity and as to action in another capacity while holding such
office, and shall continue as to a person who has ceased to be an Agent and
shall inure to the benefit of the heirs, executors and administrators of such
a person. All rights to indemnification under this Article shall be deemed
to be a contract between the Corporation and the Agent who serves in such
capacity at any time while the Certificate of Incorporation and other
relevant provisions of the DGCL and other applicable law, if any, are in
effect. Any repeal or modification thereof shall not affect any rights or
obligations then existing.
SECTION 6.8 INSURANCE. The Corporation may purchase and maintain
insurance on behalf of any person who is or was an Agent against any
liability asserted against such person and incurred by him or her in any such
capacity, or arising out of such person's status as such, whether or not the
Corporation would have the power to indemnify such person against such
liability under the provisions of this Article. The Corporation may create a
trust fund, grant a security interest or use other means (including, without
limitation, a letter of credit) to ensure the payment of such sums as may
become necessary to effect indemnification as provided herein.
SECTION 6.9 PRESUMPTIONS AND EFFECT OF CERTAIN PROCEEDINGS.
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(A) If a Change of Control (as hereinafter defined) shall have
occurred, in making a determination with respect to entitlement to
indemnification hereunder, the person, persons or entity making such
determination shall presume that the Agent is entitled to indemnification
under this Article if the Agent has submitted a request for indemnification
in accordance with Section 6.6, and the Corporation shall have the burden of
proof to overcome that presumption in connection with the making by any
person, persons or entity of any determination contrary to that presumption.
(B) If the person, persons or entity empowered or selected under
Section 6.6 to determine whether the Agent is entitled to indemnification
shall not have made such determination within 60 days after receipt by the
Corporation of the request therefor, the requisite determination of
entitlement to indemnification shall be deemed to have been made and the
Agent shall be entitled to such indemnification, absent (i) a misstatement by
the Agent of a material fact, or an omission of a material fact necessary to
make the Agent's statement not materially misleading, in connection with the
request for indemnification, or (ii) a prohibition of such indemnification
under applicable law; PROVIDED, HOWEVER, that such 60-day period may be
extended for a reasonable time, not to exceed an additional 30 days, if the
person, persons or entity making the determination with respect to
entitlement to indemnification in good faith requires such additional time
for the obtaining or evaluating of documentation and/or information relating
thereto; and PROVIDED, FURTHER, that the foregoing provisions of this Section
6.9 shall not apply (a) if the determination of entitlement to
indemnification is to be made by the stockholders pursuant to Section 6.6 and
if (A) within 15 days after receipt by the Corporation of the request for
such determination the Board of Directors has resolved to submit such
determination to the stockholders for their consideration at an annual
meeting thereof to be held within 75 days after such receipt and such
determination is made thereat, or (B) a special meeting of the stockholders
is called within 15 days after such receipt for the purpose of making such
determination, such meeting is held for such purpose within 60 days after
having been so called and such determination is made thereat, or (b) if the
determination of entitlement to indemnification is to be made by Independent
Counsel pursuant to Section 6.5.
(C) The termination of any proceeding or of any claim, issue or matter
therein by judgment, order, settlement or conviction, or upon a plea of nolo
contendere or its equivalent, shall not (except as otherwise expressly
provided in this Article) of itself adversely affect the right of the Agent
to indemnification or create a presumption that the Agent did not act in good
faith and in a manner which such person reasonably believed to be in or not
opposed to the best interests of the Corporation, or, with respect to any
criminal proceeding, that the Agent had reasonable cause to believe that such
person's conduct was unlawful.
SECTION 6.10. OTHER ENTERPRISES, FINES, AND SERVING AT CORPORATION'S
REQUEST. For the purposes of this Article, references to "other enterprise"
in Section 6.12(A) below shall include employee benefit plans; references to
"fines" shall include any excise taxes assessed on a person with respect to
any employee benefit plan; and references to "serving at the request of the
Corporation" shall include any service by the Agent as a director, officer or
employee of the Corporation which imposes duties on, or involves services by,
such Agent with respect to any employee benefit plan, its participants, or
beneficiaries; and a person who acted in good faith and
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in a manner such person reasonably believed to be in the interest of the
participants and beneficiaries of an employee benefit plan shall be deemed to
have acted in a manner "not opposed to the best interests of the Corporation"
as referred to in this Article.
SECTION 6.11. SAVINGS CLAUSE. If this Article or any portion thereof
shall be invalidated on any ground by any court of competent jurisdiction,
then the Corporation shall nevertheless indemnify each Agent as to costs,
charges and Expenses, judgments, fines and amounts paid in settlement with
respect to any action, suit, proceeding or investigation, and any appeal
therefrom, whether civil, criminal or administrative, and whether internal or
external, including a grand jury proceeding and an action or suit brought by
or in the right of the Corporation, to the full extent permitted by any
applicable portion of this Article that shall not have been invalidated, and
to the fullest extent permitted by applicable law.
SECTION 6.12. CERTAIN DEFINITIONS. For the purposes of this Article VI:
(A) "Agent" means any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action, suit or
proceeding or investigation, whether civil, criminal or administrative, and
whether external or internal to the Corporation (other than a judicial action
or suit brought by or in the right of the Corporation) by reason of the fact
that he or she is or was or has agreed to be a director, officer or employee
of the Corporation, or that, being or having been such a director, officer or
employee, he or she is or was serving at the request of the Corporation as a
director, officer or employee of another corporation, partnership, joint
venture, trust or other enterprise.
(B) "Change of Control" means a change in control of the Corporation of
a nature that would be required to be reported in response to Item 5(f) of
Schedule 14A of Regulation 14A (or in response to any similar item on any
similar schedule or form) promulgated under the Exchange Act, whether or not
the Corporation is then subject to such reporting requirement; PROVIDED,
HOWEVER, that, without limitation, such a Change in Control shall be deemed
to have occurred if: (i) any "person" (as such term is used in Sections
13(d) and 14(d) of the Exchange Act) is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Corporation representing 25% or more of the combined voting
power of the Corporation's then outstanding securities without the prior
approval of at least two-thirds of the members of the Board of Directors in
office immediately prior to such person attaining such percentage interest;
(ii) the Corporation is a party to a merger, consolidation, sale of assets or
other reorganization, or a proxy contest, as a consequence of which members
of the Board of Directors in office immediately prior to such transaction or
event constitute less than a majority of the Board of Directors thereafter;
or (iii) during any period of three consecutive years, individuals who at the
beginning of such period constituted the Board of Directors (including for
this purpose any new director whose election or nomination for election by
the Corporation's stockholders was approved by a vote of at least two-thirds
of the directors then still in office who were directors at the beginning of
such period) cease for any reason to constitute at least a majority of the
Board of Directors.
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(C) "Disinterested Director" means a director of the Corporation who is
not and was not a party to the matter in respect of which indemnification is
sought by the claimant.
(D) "Expenses" shall include all reasonable attorneys' fees, retainers,
court costs, transcript costs, fees of experts, witness fees, travel
expenses, duplicating costs, printing and binding costs, telephone charges,
postage, delivery service fees, and all other disbursements or expenses of
the types customarily incurred in connection with prosecuting, defending,
preparing to prosecute or defend, investigating, or being or preparing to be
a witness in a proceeding.
(E) "Independent Counsel" means a law firm, a member of a law firm, or
an independent practitioner, that is experienced in matters of corporation
law and shall include any person who, under the applicable standards of
professional conduct then prevailing, would not have a conflict of interest
in representing either the Corporation or the claimant in an action to
determine the claimant's rights under this Article VI.
ARTICLE VII.
MISCELLANEOUS PROVISIONS
SECTION 7.1. FISCAL YEAR. The fiscal year of the Corporation shall
begin on the first day of January and end on the thirty-first day of December
of each year.
SECTION 7.2. DIVIDENDS. The Board of Directors may from time to time
declare, and the Corporation may pay, dividends on its outstanding shares in
the manner and upon the terms and conditions provided by law and the
Certificate of Incorporation. Dividends may be paid in cash, in property, or
in shares of the capital stock of the Corporation. Before payment of any
dividend, there may be set aside out of any funds of the Corporation
available for dividends, such sum or sums as the directors may, from time to
time in their absolute discretion, think proper as a reserve fund to meeting
contingencies, or for equalizing dividends, or for repairing or maintaining
any property of the Corporation, or for such other purpose as the directors
shall think conducive to the interest of the Corporation, and the directors
may abolish any such reserve in the manner in which it was created.
SECTION 7.3. SEAL. The corporate seal shall have inscribed thereon
the name of the Corporation, the year of incorporation and the words
"Corporation Seal, Delaware." Said seal may be used by causing it or a
facsimile thereof to be impressed or affixed or reproduced or otherwise.
SECTION 7.4. WAIVER OF NOTICE. Whenever any notice is required to be
given to any stockholder or director of the Corporation under the provisions
of the DGCL or these By-Laws, a waiver thereof in writing, signed by the
person or persons entitled to such notice, whether before or after the time
stated therein, shall be deemed equivalent to the giving of such notice.
Neither the business to be transacted at, nor the purpose of, any annual or
special meeting of the stockholders or the Board of Directors or committee
thereof need be specified in any waiver of notice of such meeting.
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SECTION 7.5. AUDITS. The accounts, books and records of the
Corporation shall be audited upon the conclusion of each fiscal year by an
independent certified public accountant selected by the Board of Directors,
and it shall be the duty of the Board of Directors to cause such audit to be
done annually.
SECTION 7.6. Resignations. Any director or any officer, whether
elected or appointed, may resign at any time by giving written notice of such
resignation to the Chairman of the Board, the President, or the Secretary,
and such resignation shall be deemed to be effective as of the close of
business on the date said notice is received by the Chairman of the Board,
the President, or the Secretary, or at such later time as is specified
therein. No formal action shall be required of the Board of Directors or the
stockholders to make any such resignation effective.
SECTION 7.7. COMPLIANCE WITH APPLICABLE GAMING LAWS.
(A) If the Corporation becomes, and so long as it remains, either a
holding company or an intermediary holding company subject to regulation
under any Gaming Laws, all securities of the Corporation shall be held
subject to the applicable provisions of such Gaming Laws. If a holder
thereof is found to be disqualified by any Gaming Authorities, then such
holder shall dispose of his or her interest in the Corporation as provided in
the Certificate of Incorporation and pursuant to the applicable provisions of
any Gaming Laws, and orders or rulings of any Gaming Authorities.
(B) For the purposes of these By-Laws, "Gaming Authority" means any
government, court, or federal, state, local, international or foreign
governmental, administrative, regulatory or licensing body, agency, authority
or official which regulates, has authority or otherwise asserts jurisdiction
over gaming activities (or proposed gaming activities), gaming operations or
facilities conducted by the Corporation or any of its subsidiaries or
affiliates, within any gaming jurisdictions (domestic and foreign and the
political subdivisions thereof), whether now or hereafter existing, including
without limitation, the Nevada Gaming Control Board, the Nevada Gaming
Commission, the Clark County Liquor and Gaming Licensing Board, the New
Jersey Casino Control Commission, the Louisiana Gaming Control Board, the
Mississippi Gaming Commission and the Missouri Gaming Commission.
(C) For the purposes of these By-Laws, "Gaming Law" means any federal,
state, local, international or foreign law, statute, order, ordinance or
interpretation pursuant to which any Gaming Authority possesses or asserts
regulatory or licensing authority over gaming activities, operations or
facilities within any gaming jurisdictions (domestic and foreign and the
political subdivisions thereof), including any rules and regulations
promulgated by such Gaming Authority thereunder, including, without
limitation, the Nevada Gaming Control Act, the Clark County Code, the New
Jersey Casino Control Act, the Louisiana Riverboat Economic Development and
Gaming Control Act, the Mississippi Gaming Control Act and the Missouri
Gaming Law.
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ARTICLE VIII.
CONTRACTS, PROXIES, ETC.
SECTION 8.1. CONTRACTS. Except as otherwise required by law, the
Certificate of Incorporation or these By-Laws, any contracts or other
instruments may be executed and delivered in the name and on the behalf of
the Corporation by such officer or officers of the Corporation as the Board
of Directors may from time to time direct. Such authority may be general or
confined to specific instances as the Board may determine. The Chairman of
the Board, the President or any Executive Vice President, Senior Vice
President or Vice President may execute bonds, contracts, deeds, leases and
other instruments to be made or executed for or on behalf of the Corporation.
Subject to any restrictions imposed by the Board of Directors or the Chairman
of the Board, the President or any Executive Vice President, Senior Vice
President or Vice President of the Corporation may delegate contractual
powers to others under his jurisdiction, it being understood, however, that
any such delegation of power shall not relieve such officer of responsibility
with respect to the exercise of such delegated power.
SECTION 8.2. PROXIES. Unless otherwise provided by resolution adopted
by the Board of Directors, the Chairman of the Board, the President or any
Executive Vice President, Senior Vice President or Vice President may from
time to time appoint an attorney or attorneys or agent or agents of the
Corporation, in the name and on behalf of the Corporation, to cast the votes
which the Corporation may be entitled to cast as the holder of stock or other
securities in any other corporation, any of whose stock or other securities
may be held by the Corporation, at meetings of the holders of the stock or
other securities of such other corporation, or to consent in writing, in the
name of the Corporation as such holder, to any action by such other
corporation, and may instruct the person or persons so appointed as to the
manner of casting such votes or giving such consent, and may execute or cause
to be executed in the name and on behalf of the Corporation and under its
corporate seal or otherwise, all such written proxies or other instruments as
he may deem necessary or proper in the premises.
ARTICLE IX.
AMENDMENTS
SECTION 9.1. AMENDMENTS. These By-Laws may be altered, amended, or
repealed at any meeting of the Board of Directors or of the stockholders,
provided that notice of the proposed change was given in the notice of the
meeting and, in the case of a meeting of the Board of Directors, in a notice
given not less than two days prior to the meeting; PROVIDED, HOWEVER, that,
in the case of amendments by stockholders, notwithstanding any other
provisions of these By-Laws or any provision of law which might otherwise
permit a lesser vote or no vote, but in addition to any affirmative vote of
the holders of any particular class or series of the capital stock of the
Corporation required by law, the Certificate of Incorporation or these
By-Laws, the affirmative vote of the holders of at least 75% of the voting
power of all the then outstanding shares of the Voting Stock, voting together
as a single class, shall be required to alter, amend or repeal any provision
of these By-Laws.
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PARK PLACE ENTERTAINMENT CORPORATION
1998 STOCK INCENTIVE PLAN
SECTION 1. PURPOSE; DEFINITIONS
The purpose of the Plan is to give the Corporation a competitive
advantage in attracting, retaining and motivating officers, employees, and
the CEO and Chairman and to provide the Corporation and its subsidiaries with
a stock plan providing incentives more directly linked to the profitability
of the Corporation's businesses and increases in shareholder value.
For purposes of the Plan, the following terms are defined as set forth
below:
a. "AFFILIATE" means a corporation or other entity controlled by the
Corporation and designated by the Committee from time to time as such.
b. "AWARD" means a Stock Appreciation Right or a Stock Option.
c. "BOARD" means the Board of Directors of the Corporation.
d. "CEO" means the Chief Executive Officer of the Corporation.
e. "CHAIRMAN" means the Chairman of the Board.
f. "CHAIRMAN AGREEMENT" means the Employment Agreement by and
between the Corporation and its initial Chairman, which sets forth certain
terms of such Chairman's employment with the Corporation.
g. "CHANGE IN CONTROL" and "CHANGE IN CONTROL PRICE" have the
meanings set forth in Sections 7(b) and (c), respectively.
h. "CODE" means the Internal Revenue Code of 1986, as amended from
time to time, and any successor thereto.
i. "COMMISSION" means the Securities and Exchange Commission or any
successor agency.
j. "COMMITTEE" means the Committee referred to in Section 2.
k. "COMMON STOCK" means common stock, par value $.01 per share, of
the Corporation.
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l. "CORPORATION" means Park Place Entertainment Corporation, a
Delaware corporation.
m. "DISABILITY" means permanent and total disability as determined
under procedures established by the Committee for purposes of the Plan.
n. "DISTRIBUTION" means the distribution to the holders of the
outstanding shares of Hilton Common Stock, on a one-for-one basis, of all of
the outstanding shares of Common Stock.
o. "EMPLOYMENT AGREEMENT" means the Employment Agreement by and
between the Corporation and its initial CEO, which sets forth the terms of
such CEO's employment with the Corporation.
p. "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended from time to time, and any successor thereto.
q. "FAIR MARKET VALUE" means, except as provided in Section
6(b)(ii)(2), as of any given date, the mean between the highest and lowest
reported sales prices of the Common Stock on the New York Stock Exchange
Composite Tape or, if not listed on such exchange, on any other national
securities exchange on which the Common Stock is listed or on NASDAQ. If
there is no regular public trading market for such Common Stock, the Fair
Market Value of the Common Stock shall be determined by the Committee in good
faith.
r. "HILTON" means Hilton Hotels Corporation, a Delaware corporation.
s. "HILTON COMMON STOCK" means common stock, par value $2.50 per
share, of Hilton.
t. "INCENTIVE STOCK OPTION" means any Stock Option designated as,
and qualified as, an "incentive stock option" within the meaning of Section
422 of the Code.
u. "NONQUALIFIED STOCK OPTION" means any Stock Option that is not an
Incentive Stock Option.
v. "PLAN" means the Park Place Entertainment Corporation 1998 Stock
Incentive Plan, as set forth herein and as hereinafter amended from time to
time.
w. "RETIREMENT" means retirement from active employment with the
Corporation, a subsidiary or Affiliate at or after age 62.
x. "RULE 16b-3" means Rule 16b-3, as promulgated by the Commission
under Section 16(b) of the Exchange Act, as amended from time to time.
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y. "SPECIAL OPTION" means a Nonqualified Stock Option granted to the
CEO or Chairman pursuant to Section 13.
z. "STOCK APPRECIATION RIGHT" means a right granted under Section 6.
aa. "STOCK OPTION" means an option granted under the Plan.
bb. "TERMINATION OF EMPLOYMENT" means the termination of the
participant's employment with the Corporation and any subsidiary or
Affiliate. A participant employed by a subsidiary or an Affiliate shall also
be deemed to incur a Termination of Employment if the subsidiary or Affiliate
ceases to be such a subsidiary or an Affiliate, as the case may be, and the
participant does not immediately thereafter become an employee of the
Corporation or another subsidiary or Affiliate. Temporary absences from
employment because of illness, vacation or leave of absence and transfers
among the Corporation and its subsidiaries and Affiliates shall not be
considered Terminations of Employment.
In addition, certain other terms used herein have definitions given to
them in the first place in which they are used.
SECTION 2. ADMINISTRATION
Prior to the date of the Distribution, the Plan shall be administered by
the Stock Option Committee of the Board of Directors of Hilton under the
Hilton Hotels Corporation 1996 Stock Incentive Plan. From and after the date
of the Distribution, the Plan shall be administered by the Stock Option
Committee or such other committee of the Board as the Board may from time to
time designate (the "Committee"), which shall be composed of not less than
two members of the Board, each of whom shall be an "outside director" for
purposes of Section 162(m)(4) of the Code and a "non-employee director"
within the meaning of Rule 16b-3, and shall be appointed by and serve at the
pleasure of the Board.
The Committee shall have authority to grant Awards pursuant to the terms
of the Plan to officers and employees of the Corporation and its subsidiaries
and Affiliates.
Among other things, the Committee shall have the authority, subject to
the terms of the Plan:
(a) To select the officers and employees to whom Awards may from time
to time be granted;
(b) Determine whether and to what extent Incentive Stock Options,
Nonqualified Stock Options and Stock Appreciation Rights or any combination
thereof are to be granted hereunder;
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(c) Determine the number of shares of Common Stock to be covered by
each Award granted hereunder;
(d) Determine the terms and conditions of any Award granted hereunder
(including, but not limited to, the option price (subject to Section 5(a)),
any vesting condition, restriction or limitation (which may be related to the
performance of the participant, the Corporation or any subsidiary or
Affiliate) and any vesting acceleration or forfeiture waiver regarding any
Award and the shares of Common Stock relating thereto, based on such factors
as the Committee shall determine;
(e) Modify, amend or adjust the terms and conditions of any Award, at
any time or from time to time; and
(f) Determine to what extent and under what circumstances Common
Stock and other amounts payable with respect to an Award shall be deferred.
The Committee shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan as it shall
from time to time deem advisable, to interpret the terms and provisions of
the Plan and any Award issued under the Plan (and any agreement relating
thereto) and to otherwise supervise the administration of the Plan.
The Committee may act only by a majority of its members then in office,
except that the members thereof may (i) delegate to an officer of the
Corporation the authority to make decisions pursuant to paragraphs (c), (f),
(g), (h) and (i) of Section 5 (provided that no such delegation may be made
that would cause Awards or other transactions under the Plan to cease to be
exempt from Section 16(b) of the Exchange Act) and (ii) authorize any one or
more of their number or any officer of the Corporation to execute and deliver
documents on behalf of the Committee.
Any determination made by the Committee or pursuant to delegated
authority pursuant to the provisions of the Plan with respect to any Award
shall be made in the sole discretion of the Committee or such delegate at the
time of the grant of the Award or, unless in contravention of any express
term of the Plan, at any time thereafter. All decisions made by the
Committee or any appropriately delegated officer pursuant to the provisions
of the Plan shall be final and binding on all persons, including the
Corporation and Plan participants.
SECTION 3. COMMON STOCK SUBJECT TO PLAN
The total number of shares of Common Stock reserved and available for
grant under the Plan shall be 45,000,000. Of that amount, a maximum of
9,000,000 shares of Common Stock are reserved and available for the grant of
Special Options. Except with respect to the Special Options and Adjusted
Park Place Options issued pursuant to the Option Adjustment, no participant
may be granted Awards covering in excess of 2,000,000 shares of Common Stock
in
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any calendar year; PROVIDED, HOWEVER, that Adjusted Park Place Options issued
pursuant to the Option Adjustment under Section 12 hereof shall not count
towards such limit. With respect to the Adjusted Park Place Options, no
participant may be granted Awards in any calendar year covering in excess of
the number of shares of Common Stock required to make the option adjustment
with respect to such participant prescribed by Section 12(a) hereof. With
respect to the Special Options, the CEO may not be granted Special Options
covering in excess of 6,000,000 shares of Common Stock in the aggregate, and
the Chairman may not be granted Special Options covering in excess of
3,000,000 shares of Common Stock in the aggregate. Shares subject to an Award
under the Plan may be authorized and unissued shares or may be treasury
shares.
If any Stock Option (and related Stock Appreciation Right, if any)
terminates without being exercised, shares subject to such Awards shall again
be available for distribution in connection with Awards under the Plan.
In the event of any change in corporate capitalization, such as a stock
split or a corporate transaction, any merger, consolidation, separation,
including a spin-off, or other distribution of stock or property of the
Corporation, any reorganization (whether or not such reorganization comes
within the definition of such term in Section 368 of the Code) or any partial
or complete liquidation of the Corporation, the Committee or Board may make
such substitution or adjustments in the aggregate number and kind of shares
reserved for issuance under the Plan, in the number, kind and option price of
shares subject to outstanding Stock Options and Stock Appreciation Rights, in
the number and kind of shares subject to other outstanding Awards granted
under the Plan and/or such other equitable substitution or adjustments as it
may determine to be appropriate in its sole discretion; PROVIDED, HOWEVER,
that the number of shares subject to any Award shall always be a whole
number. Such adjusted option price shall also be used to determine the
amount payable by the Corporation upon the exercise of any Stock Appreciation
Right associated with any Stock Option.
SECTION 4. ELIGIBILITY
Except with respect to the Special Options and as provided in Section
12, full-time (30 hours per week) officers and employees of the Corporation,
its subsidiaries and Affiliates who are responsible for or contribute to the
management, growth and profitability of the business of the Corporation, its
subsidiaries and Affiliates are eligible to be granted Awards under the Plan.
Except with respect to the Special Options, no grant shall be made under
this Plan to a director who is not an officer or a salaried employee of the
Corporation, its subsidiaries or Affiliates. Only the CEO and the Chairman
are eligible to be granted Special Options under the Plan.
SECTION 5. STOCK OPTIONS
Stock Options may be granted alone or in addition to other Awards
granted under the Plan and, except with respect to the Special Options, may
be of two types: Incentive Stock
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Options and Nonqualified Stock Options. Special Options may only be
Nonqualified Stock Options. Any Stock Option granted under the Plan shall be
in such form as the Committee may from time to time approve.
Except with respect to the Special Options, the Committee shall have the
authority to grant any optionee Incentive Stock Options, Nonqualified Stock
Options or both types of Stock Options (in each case with or without Stock
Appreciation Rights); PROVIDED, HOWEVER, that grants hereunder are subject to
the aggregate limit on grants to individual participants set forth in Section
3. Incentive Stock Options may be granted only to employees of the
Corporation and its subsidiaries (within the meaning of Section 424(f) of the
Code). To the extent that any Stock Option is not designated as an Incentive
Stock Option or even if so designated does not qualify as an Incentive Stock
Option, it shall constitute a Nonqualified Stock Option.
Stock Options shall be evidenced by option agreements, the terms and
provisions of which may differ. An option agreement shall indicate on its
face whether it is intended to be an agreement for an Incentive Stock Option
or a Nonqualified Stock Option. The grant of a Stock Option shall occur on
the date a majority of the independent directors of the Corporation ratify by
resolution the Committee's recommendation with respect to the individuals to
be participants in any grant of a Stock Option, the number of shares of
Common Stock to be subject to such Stock Option to be granted to such
individual and specifies the terms and provisions of the Stock Option. The
Corporation shall notify a participant of any grant of a Stock Option, and a
written option agreement or agreements shall be duly executed and delivered
by the Corporation to the participant. Such agreement or agreements shall
become effective upon execution by the Corporation and the participant.
Anything in the Plan to the contrary notwithstanding, no term of the
Plan relating to Incentive Stock Options shall be interpreted, amended or
altered nor shall any discretion or authority granted under the Plan be
exercised so as to disqualify the Plan under Section 422 of the Code or,
without the consent of the optionee affected, to disqualify any Incentive
Stock Option under such Section 422.
Stock Options granted under the Plan shall be subject to the following
terms and conditions and shall contain such additional terms and conditions
as the Committee shall deem desirable:
(a) OPTION PRICE. The option price per share of Common Stock
purchasable under a Stock Option shall be determined by the Committee and set
forth in the option agreement, and shall not be less than the Fair Market
Value of the Common Stock subject to the Stock Option on the date of grant.
(b) OPTION TERM. The term of each Stock Option shall be fixed by the
Committee, but no Incentive Stock Option shall be exercisable more than ten
years after the date the Stock Option is granted and no Nonqualified Stock
Option shall be exercisable more than ten years and
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one day after the date the Stock Option is granted.
(c) EXERCISABILITY. Except as otherwise provided herein, Stock
Options shall be exercisable at such time or times and subject to such terms
and conditions as shall be determined by the Committee. If the Committee
provides that any Stock Option is exercisable only in installments, the
Committee may at any time waive such installment exercise provisions, in
whole or in part, based on such factors as the Committee may determine. In
addition, the Committee may at any time accelerate the exercisability of any
Stock Option.
(d) METHOD OF EXERCISE. Subject to the provisions of this Section 5,
Stock Options may be exercised, in whole or in part, at any time during the
option term by giving written notice of exercise to the Corporation
specifying the number of shares of Common Stock subject to the Stock Option
to be purchased.
Such notice shall be accompanied by payment in full of the purchase
price by certified or bank check or such other instrument as the Committee
may accept. Payment, in full or in part, may also be made in the form of
unrestricted Common Stock already owned by the optionee of the same class as
the Common Stock subject to the Stock Option (based on the Fair Market Value
of the Common Stock on the date the Stock Option is exercised).
Payment for any shares subject to a Stock Option may also be made by
delivering a properly executed exercise notice to the Corporation, together
with a copy of irrevocable instructions to a broker to deliver promptly to
the Corporation the amount of sale or loan proceeds to pay the purchase
price, and, if requested, by the amount of any federal, state, local or
foreign withholding taxes. To facilitate the foregoing, the Corporation may
enter into agreements for coordinated procedures with one or more brokerage
firms.
No shares of Common Stock shall be issued until full payment therefor
has been made. An optionee shall have all of the rights of a shareholder of
the Corporation holding the class or series of Common Stock that is subject
to such Stock Option (including, if applicable, the right to vote the shares
and the right to receive dividends), when the optionee has given written
notice of exercise, has paid in full for such shares and, if requested, has
given the representation described in Section 11(a).
(e) NONTRANSFERABILITY OF STOCK OPTIONS. No Stock Option shall be
transferable by the optionee other than (i) by will or by the laws of descent
and distribution; or (ii) in the case of a Nonqualified Stock Option,
pursuant to a qualified domestic relations order (as defined in the Code or
Title I of the Employee Retirement Income Security Act of 1974, as amended,
or the rules thereunder); or (iii) in the case of the Special Options,
subject to such terms as the Committee deems appropriate, pursuant to a
transfer to the optionee's spouse, children, grandchildren or parents
("Family Members"), to trusts for the benefit of Family Members, to
partnerships or limited liability companies in which Family Members are the
only partners or shareholders, or to entities exempt from federal income tax
pursuant to Section 501(c)(3) of the
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Code. All Stock Options shall be exercisable, subject to the terms of this
Plan, during the optionee's lifetime, only by the optionee or by the guardian
or legal representative of the optionee or, in the case of a Nonqualified
Stock Option, its alternative payee pursuant to such qualified domestic
relations order, it being understood that the terms "holder" and "optionee"
include the guardian and legal representative of the optionee named in the
option agreement and any person to whom an option is transferred by will or
the laws of descent and distribution or, in the case of a Nonqualified Stock
Option, pursuant to a qualified domestic relations order.
(f) TERMINATION BY DEATH. Unless otherwise determined by the
Committee, if an optionee's employment terminates by reason of death, any
Stock Option held by such optionee may thereafter be exercised, to the
extent then exercisable, or on such accelerated basis as the Committee may
determine, for a period of one year (or such other period as the Committee
may specify in the option agreement) from the date of such death or until the
expiration of the stated term of such Stock Option, whichever period is the
shorter.
(g) TERMINATION BY REASON OF DISABILITY. Unless otherwise determined
by the Committee, if an optionee's employment terminates by reason of
Disability, any Stock Option held by such optionee may thereafter be
exercised by the optionee, to the extent it was exercisable at the time of
termination, or on such accelerated basis as the Committee may determine, for
a period of six months (or such other period as the Committee may specify in
the option agreement) from the date of such termination of employment or
until the expiration of the stated term of such Stock Option, whichever
period is the shorter; PROVIDED, HOWEVER, that if the optionee dies within
such period, any unexercised Stock Option held by such optionee shall,
notwithstanding the expiration of such period, continue to be exercisable to
the extent to which it was exercisable at the time of death for a period of
12 months from the date of such death or until the expiration of the stated
term of such Stock Option, whichever period is the shorter. In the event of
termination of employment by reason of Disability, if an Incentive Stock
Option is exercised after the expiration of the exercise periods that apply
for purposes of Section 422 of the Code, such Stock Option will thereafter be
treated as a Nonqualified Stock Option.
(h) TERMINATION BY REASON OF RETIREMENT. Unless otherwise determined
by the Committee, if an optionee's employment terminates by reason of
Retirement, any Stock Option held by such optionee may thereafter be
exercised by the optionee, to the extent it was exercisable at the time of
such Retirement, or on such accelerated basis as the Committee may determine,
for a period of two years (or such other period as the Committee may specify
in the option agreement) from the date of such termination of employment or
until the expiration of the stated term of such Stock Option, whichever
period is the shorter; PROVIDED, HOWEVER, that if the optionee dies within
such period any unexercised Stock Option held by such optionee shall,
notwithstanding the expiration of such period, continue to be exercisable to
the extent to which it was exercisable at the time of death for a period of
12 months from the date of such death or until the expiration of the stated
term of such Stock Option, whichever period is the shorter. In the event of
termination of employment by reason of Retirement, if an Incentive Stock
Option is exercised after the expiration of the exercise periods that apply
for purposes of Section 422 of the
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Code, such Stock Option will thereafter be treated as a Nonqualified Stock
Option.
(i) OTHER TERMINATION. Unless otherwise determined by the Committee:
(A) if an optionee incurs a Termination of Employment, all Stock Options held
by such optionee shall thereupon terminate; and (B) if an optionee incurs a
Termination of Employment for any reason other than death, Disability or
Retirement, any Stock Option held by such optionee, to the extent then
exercisable, or on such accelerated basis as the Committee may determine, may
be exercised for the lesser of three months from the date of such Termination
of Employment or the balance of such Stock Option's term; PROVIDED, HOWEVER,
that if the optionee dies within such three-month period, any unexercised
Stock Option held by such optionee shall, notwithstanding the expiration of
such three-month period, continue to be exercisable to the extent to which it
was exercisable at the time of death for a period of 12 months from the date
of such death or until the expiration of the stated term of such Stock
Option, whichever period is the shorter. Notwithstanding the foregoing, if
an optionee incurs a Termination of Employment at or after a Change in
Control (as defined Section 7(b)), other than by reason of death, Disability
or Retirement, any Stock Option held by such optionee shall be exercisable
for the lesser of (1) six months and one day from the date of such
Termination of Employment, and (2) the balance of such Stock Option's term.
In the event of Termination of Employment, if an Incentive Stock Option is
exercised after the expiration of the exercise periods that apply for
purposes of Section 422 of the Code, such Stock Option will thereafter be
treated as a Nonqualified Stock Option.
(j) CHANGE IN CONTROL CASH-OUT. Notwithstanding any other provision
of the Plan, during the 60-day period from and after a Change in Control (the
"Exercise Period"), unless the Committee shall determine otherwise at the
time of grant, an optionee shall have the right, whether or not the Stock
Option is fully exercisable and in lieu of the payment of the exercise price
for the shares of Common Stock being purchased under the Stock Option and by
giving notice to the Corporation, to elect (within the Exercise Period) to
surrender all or part of the Stock Option to the Corporation and to receive
cash, within 30 days of such notice, in an amount equal to the amount by
which the Change in Control Price per share of Common Stock on the date of
such election shall exceed the exercise price per share of Common Stock under
the Stock Option (the "Spread") multiplied by the number of shares of Common
Stock granted under the Stock Option as to which the right granted under this
Section 5(j) shall have been exercised; PROVIDED, HOWEVER, that if the Change
in Control is within six months of the date of grant of a particular Stock
Option held by an optionee who is an officer or director of the Corporation
and is subject to Section 16(b) of the Exchange Act no such election shall be
made by such optionee with respect to such Stock Option prior to six months
from the date of grant. However, if the end of such 60-day period from and
after a Change in Control is within six months of the date of grant of a
Stock Option held by an optionee who is an officer or director of the
Corporation and is subject to Section 16(b) of the Exchange Act, such Stock
Option shall be cancelled in exchange for a cash payment to the optionee,
effected on the day which is six months and one day after the date of grant
of such Option, equal to the Spread multiplied by the number of shares of
Common Stock granted under the Stock Option. Notwithstanding the foregoing,
if any right granted pursuant to this Section 5(j) would make a Change in
Control transaction ineligible for
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pooling of interests accounting under APB No. 16 that but for this Section
5(j) would otherwise be eligible for such accounting treatment, the Committee
shall have the ability to substitute the cash payable pursuant to this
Section 5(j) with Stock with a Fair Market Value equal to the cash that would
otherwise be payable hereunder.
SECTION 6. STOCK APPRECIATION RIGHTS
(a) GRANT AND EXERCISE. Stock Appreciation Rights may be granted in
conjunction with all or part of any Stock Option granted under the Plan. In
the case of a Nonqualified Stock Option, such rights may be granted either at
or after the time of grant of such Stock Option. In the case of an Incentive
Stock Option, such rights may be granted only at the time of grant of such
Stock Option. A Stock Appreciation Right shall terminate and no longer be
exercisable upon the termination or exercise of the related Stock Option.
A Stock Appreciation Right may be exercised by an optionee in accordance
with Section 6(b) by surrendering the applicable portion of the related Stock
Option in accordance with procedures established by the Committee. Upon such
exercise and surrender, the optionee shall be entitled to receive an amount
determined in the manner prescribed in Section 6(b). Stock Options which
have been so surrendered shall no longer be exercisable to the extent the
related Stock Appreciation Rights have been exercised.
(b) TERMS AND CONDITIONS. Stock Appreciation Rights shall be subject
to such terms and conditions as shall be determined by the Committee,
including the following:
(i) Stock Appreciation Rights shall be exercisable only at
such time or times and to the extent that the Stock Options to which
they relate are exercisable in accordance with the provisions of Section
5 and this Section 6; PROVIDED, HOWEVER, that a Stock Appreciation Right
shall not be exercisable during the first six months of its term by an
optionee who is actually or potentially subject to Section 16(b) of the
Exchange Act, except that this limitation shall not apply in the event
of death or Disability of the optionee prior to the expiration of the
six-month period.
(ii) Upon the exercise of a Stock Appreciation Right, an
optionee shall be entitled to receive an amount in cash, shares of
Common Stock or both, equal in value to the excess of the Fair Market
Value of one share of Common Stock over the option price per share
specified in the related Stock Option multiplied by the number of shares
in respect of which the Stock Appreciation Right shall have been
exercised, with the Committee having the right to determine the form of
payment.
(iii) Stock Appreciation Rights shall be transferable only to
permitted transferees of the underlying Stock Option in accordance with
Section 5(e).
(iv) Upon the exercise of a Stock Appreciation Right, the Stock
Option or part
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thereof to which such Stock Appreciation Right is related shall be
deemed to have been exercised for the purpose of the limitation set
forth in Section 3 on the number of shares of Common Stock to be issued
under the Plan, but only to the extent of the number of shares covered
by the Stock Appreciation Right at the time of exercise based on the
value of the Stock Appreciation Right at such time.
SECTION 7. CHANGE IN CONTROL PROVISIONS
(a) IMPACT OF EVENT. Notwithstanding any other provision of the Plan to
the contrary, in the event of a Change in Control, any Stock Options and Stock
Appreciation Rights outstanding as of the date such Change in Control is
determined to have occurred, and which are not then exercisable and vested,
shall become fully exercisable and vested to the full extent of the original
grant; PROVIDED, HOWEVER, that in the case of the holder of Stock Appreciation
Rights who is actually subject to Section 16(b) of the Exchange Act, such Stock
Appreciation Rights shall have been outstanding for at least six months at the
date such Change in control is determined to have occurred.
(b) DEFINITION OF CHANGE IN CONTROL. For purposes of the Plan, a
"Change in Control" shall mean the happening of any of the following events:
(i) An acquisition by any individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a
"Person") of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 20% or more of either (1) the
then outstanding shares of common stock of the Corporation (the
"Outstanding Corporation Common Stock") or (2) the combined voting power
of the then outstanding voting securities of the Corporation entitled to
vote generally in the election of directors (the "Outstanding
Corporation Voting Securities")(a "Control Purchase"); excluding,
however, the following: (1) Any acquisition directly from the
Corporation, other than an acquisition by virtue of the exercise of a
conversion privilege unless the security being so converted was itself
acquired directly from the Corporation, (2) Any acquisition by the
Corporation, (3) Any acquisition by any employee benefit plan (or
related trust) sponsored or maintained by the Corporation or any
corporation controlled by the Corporation, (4) Any acquisition by any
corporation pursuant to a transaction which complies with clauses (1),
(2) and (3) of subsection (iii) of this Section 7(b), or (5) Any
acquisition by Barron Hilton, the Charitable Remainder Unitrust created
by Barron Hilton to receive shares from the Estate of Conrad N. Hilton,
or the Conrad N. Hilton Fund; or
(ii) A change in the composition of the Board such that the
individuals who, as of the effective date of the Plan, constitute the
Board (such Board shall be hereinafter referred to as the "Incumbent
Board") cease for any reason to constitute at least a majority of the
Board; PROVIDED, HOWEVER, for purposes of this Section 7(b), that any
individual who becomes a member of the Board subsequent to the effective
date of the
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Plan, whose election, or nomination for election by the
Corporation's shareholders, was approved by a vote of at least a
majority of those individuals who are members of the Board and who were
also members of the Incumbent Board (or deemed to be such pursuant to
this proviso) shall be considered as though such individual were a
member of the Incumbent Board; but, PROVIDED FURTHER, that any such
individual whose initial assumption of office occurs as a result of
either an actual or threatened election contest (as such terms are used
in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or
other actual or threatened solicitation of proxies or consents by or on
behalf of a Person other than the Board shall not be so considered as a
member of the Incumbent Board (a "Board Change"); or
(iii) The approval by the shareholders of the Corporation of a
reorganization, merger or consolidation or sale or other disposition of all
or substantially all of the assets of the Corporation ("Corporate
Transaction"); excluding however, such a Corporate Transaction pursuant to
which (1) all or substantially all of the individuals and entities who are
the beneficial owners, respectively, of the Outstanding Corporation Common
Stock and Outstanding Corporation Voting Securities immediately prior to
such Corporate Transaction will beneficially own, directly or indirectly,
more than 60% of, respectively, the outstanding shares of common stock, and
the combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors, as the case may
be, of the corporation resulting from such Corporate Transaction
(including, without limitation, a corporation which as a result of such
transaction owns the Corporation or all or substantially all of the
Corporation's assets either directly or through one or more subsidiaries)
in substantially the same proportions as their ownership, immediately prior
to such Corporate Transaction, of the Outstanding Corporation Common Stock
and Outstanding Corporation Voting Securities, as the case may be, (2) no
Person (other than the Corporation, any employee benefit plan (or related
trust) of the Corporation or such corporation resulting from such Corporate
Transaction) will beneficially own, directly or indirectly, 20% or more of,
respectively, the outstanding shares of common stock of the corporation
resulting from such Corporate Transaction or the combined voting power of
the outstanding voting securities of such corporation entitled to vote
generally in the election of directors except to the extent that such
ownership existed prior to the Corporate Transaction, and (3) individuals
who were members of the Incumbent Board will constitute at least a majority
of the members of the board of directors of the corporation resulting from
such Corporate Transaction; or
(iv) The approval by the stockholders of the Corporation of a
complete liquidation or dissolution of the Corporation.
(c) CHANGE IN CONTROL PRICE. For purposes of the Plan, "Change in
Control Price" means the higher of (i) the highest reported sales price,
regular way, of a share of Common Stock in any transaction reported on the
New York Stock Exchange Composite Tape or other national exchange on which
such shares are listed or on NASDAQ during the 60-day period prior to and
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including the date of a Change in Control or (ii) if the Change in Control is
the result of a tender or exchange offer or a Corporate Transaction, the
highest price per share of Common Stock paid in such tender or exchange offer
or Corporate Transaction; PROVIDED, HOWEVER, that (x) in the case of a Stock
Option which (A) is held by an optionee who is an officer or director of the
Corporation and is subject to Section 16(b) of the Exchange Act and (B) was
granted within 240 days of the Change in Control, then the Change in Control
Price for such Stock Option shall be the Fair Market Value of the Common
Stock on the date such Stock Option is exercised or deemed exercised and (y)
in the case of Incentive Stock Options and Stock Appreciation Rights relating
to Incentive Stock Options, the Change in Control Price shall be in all cases
the Fair Market Value of the Common Stock on the date such Incentive Stock
Option or Stock Appreciation Right is exercised. To the extent that the
consideration paid in any such transaction described above consists all or in
part of securities or other noncash consideration, the value of such
securities or other noncash consideration shall be determined in the sole
discretion of the Board.
SECTION 8. TERM, AMENDMENT AND TERMINATION
The Plan will terminate ten years after the effective date of the Plan.
Under the Plan, Awards outstanding as of such date shall not be affected or
impaired by the termination of the Plan.
The Board may amend, alter, or discontinue the Plan, but no amendment,
alteration or discontinuation shall be made which would (i) impair the rights
of an optionee under a Stock Option or a recipient of a Stock Appreciation
Right theretofore granted without the optionee's or recipient's consent,
except such an amendment made to cause the Plan to qualify for the exemption
provided by Rule 16b-3, or (ii) disqualify the Plan from the exemption
provided by Rule 16b-3. In addition, no such amendment shall be made without
the approval of the Corporation's shareholders to the extent such approval is
required by law or agreement.
The Committee may amend the terms of any Stock Option or other Award
theretofore granted, prospectively or retroactively, but no such amendment
shall impair the rights of any holder without the holder's consent except
such an amendment made to cause the Plan or Award to qualify for the
exemption provided by Rule 16b-3.
Subject to the above provisions, the Board shall have authority to amend
the Plan to take into account changes in law and tax and accounting rules as
well as other developments, and to grant Awards which qualify for beneficial
treatment under such rules without stockholder approval.
SECTION 9. UNFUNDED STATUS OF PLAN
It is presently intended that the Plan constitute an "unfunded" plan for
incentive and deferred compensation. The Committee may authorize the
creation of trusts or other arrange-
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ments to meet the obligations created under the Plan to deliver Common Stock
or make payments; PROVIDED, HOWEVER, that unless the Committee otherwise
determines, the existence of such trusts or other arrangements is consistent
with the "unfunded" status of the Plan.
SECTION 10. GENERAL PROVISIONS
(a) The Committee may require each person purchasing or receiving
shares pursuant to an Award to represent to and agree with the Corporation in
writing that such person is acquiring the shares without a view to the
distribution thereof. The certificates for such shares may include any
legend which the Committee deems appropriate to reflect any restrictions on
transfer.
Notwithstanding any other provision of the Plan or agreements made
pursuant thereto, the Corporation shall not be required to issue or deliver
any certificate or certificates for shares of Common Stock under the Plan
prior to fulfillment of all of the following conditions:
(1) Listing or approval for listing upon notice of issuance, of
such shares on the New York Stock Exchange, Inc., or such other securities
exchange as may at the time be the principal market for the Common Stock;
(2) Any registration or other qualification of such shares of the
Corporation under any state or federal law or regulation, or the
maintaining in effect of any such registration or other qualification which
the Committee shall, in its absolute discretion upon the advice of counsel,
deem necessary or advisable; and
(3) Obtaining any other consent, approval, or permit from any
state or federal governmental agency which the Committee shall, in its
absolute discretion after receiving the advice of counsel, determine to be
necessary or advisable.
(b) Nothing contained in the Plan shall prevent the Corporation or
any subsidiary or Affiliate from adopting other or additional compensation
arrangements for its employees.
(c) Adoption of the Plan shall not confer upon any employee any right
to continued employment, nor shall it interfere in any way with the right of
the Corporation or any subsidiary or Affiliate to terminate the employment of
any employee at any time.
(d) No later than the date as of which an amount first becomes
includible in the gross income of the participant for federal income tax
purposes with respect to any Award under the Plan, the participant shall pay
to the Corporation, or make arrangements satisfactory to the Committee
regarding the payment of, any federal, state, local or foreign taxes of any
kind required by law to be withheld with respect to such amount. Unless
otherwise determined by the Corporation, withholding obligations may be
settled with Common Stock, including Common Stock that is part of the Award
that gives rise to the withholding requirement. The obligations of
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the Corporation under the Plan shall be conditional on such payment or
arrangements, and the Corporation and its Affiliates shall, to the extent
permitted by law, have the right to deduct any such taxes from any payment
otherwise due to the participant. The Committee may establish such
procedures as it deems appropriate, including making irrevocable elections,
for the settlement of withholding obligations with Common Stock.
(e) The Committee shall establish such procedures as it deems
appropriate for a participant to designate a beneficiary to whom any amounts
payable in the event of the participant's death are to be paid or by whom any
rights of the participant, after the participant's death, may be exercised.
(f) In the case of a grant of an Award to any employee of a
subsidiary of the Corporation, the Corporation may, if the Committee so
directs, issue or transfer the shares of Common Stock, if any, covered by the
Award to the subsidiary, for such lawful consideration as the Committee may
specify, upon the condition or understanding that the subsidiary will
transfer the shares of Common Stock to the employee in accordance with the
terms of the Award specified by the Committee pursuant to the provisions of
the Plan.
(g) The Plan and all Awards made and actions taken thereunder shall
be governed by and construed in accordance with the laws of the State of
Delaware, without reference to principles of conflict of laws.
SECTION 11. EFFECTIVE DATE OF PLAN
The Plan shall be effective as of July 9, 1998, provided that it is
approved by at least a majority of the shares voted of Hilton Common Stock at
the special meeting of Hilton stockholders with respect to the Distribution
and other related matters.
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SECTION 12. PROVISIONS REGARDING THE DISTRIBUTION
(a) Concurrently with the Distribution, the Corporation and Hilton
are entering into that certain Employee Benefits and Other Employment Matters
Allocation Agreement, dated as of the date of the Distribution (the "Benefits
Allocation Agreement"), which provides for the Corporation and Hilton to
allocate the responsibilities with respect to certain matters relating to
employees and employee compensation, benefits, labor and other employment
matters. Concurrently with the Distribution and pursuant to the terms of the
Benefits Allocation Agreement, all outstanding options to purchase Hilton
Common Stock (each, a "Hilton Option"), other than Hilton Options held by
Arthur M. Goldberg, shall be adjusted (the "Option Adjustment") to represent
options to purchase an equivalent number of shares of Hilton Common Stock
(each adjusted option to purchase Hilton Common Stock, an "Adjusted Hilton
Option") and shares of the Corporation's Common Stock (each adjusted option
to purchase the Corporation's Common Stock, an "Adjusted Park Place Option").
Pursuant to the Option Adjustment, the intrinsic value of the Hilton Options
immediately prior to the Distribution shall be preserved immediately after
the Distribution, and the exercise price of the Hilton Options shall be
allocated between the Adjusted Hilton Options and the Adjusted Park Place
Options based upon the relative values of Hilton Common Stock and the
Corporation's Common Stock on the date of the Distribution, all as determined
by Hilton. Concurrently with the Distribution and pursuant to the terms of
the Benefits Allocation Agreement, all outstanding Hilton Options held by
Arthur M. Goldberg shall be adjusted to represent Adjusted Park Place
Options. Pursuant to such adjustment, the intrinsic value of Mr. Goldberg's
outstanding Hilton Options immediately prior to the Distribution shall be
preserved immediately after the Distribution, and the number of shares
subject to and the exercise price of such options shall be adjusted based on
the relative values of the Hilton Common Stock and the Corporation's Common
Stock on the date of the Distribution, all as determined by Hilton.
(b) Following the date of the Option Adjustment, all Adjusted Park
Place Options which are issued as a result of Hilton Options granted under
any of the Hilton 1984 Stock Option and Stock Appreciation Rights Plan, the
Hilton 1990 Stock Option and Stock Appreciation Rights Plan, the Hilton 1996
Stock Incentive Plan, or the Hilton 1996 Chief Executive Stock Incentive Plan
shall be subject to the terms of this Plan and the applicable option
agreement, and all Adjusted Hilton Options shall be subject to the terms of
the applicable Hilton stock option plan and any applicable option agreement.
(c) For purposes of this Plan, with respect to Adjusted Park Place
Options held by Hilton Individuals (as defined in the Benefits Allocation
Agreement) as a result of the Option Adjustment, references to employment or
termination of employment in this Plan and in the applicable option agreement
shall be deemed to refer to employment by or termination of employment with
Hilton and its subsidiaries or affiliates. Notwithstanding the foregoing,
with respect to Adjusted Park Place Options held by the Chairman as a result
of the Option Adjustment, references to employment or termination of
employment in this Plan and in the applicable option agreement shall be
deemed to refer to employment by or termination of
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employment with the Corporation and Hilton and their subsidiaries or
affiliates. For purposes of this Plan, no termination of the Chairman's
employment shall be deemed to have occurred until such time as the Chairman's
employment with both the Corporation and Hilton (and their subsidiaries or
affiliates) has been terminated.
SECTION 13. SPECIAL OPTIONS
The Committee shall have the authority to grant Special Options to the
CEO and/or the Chairman on such terms and conditions as it shall determine in
its sole discretion. The terms and conditions of such Special Options
granted to the Corporation's initial CEO shall be set forth in the Employment
Agreement, and the terms and conditions of such Special Options granted to
the Corporation's initial Chairman shall be set forth in the Chairman
Agreement. To the extent that certain terms and conditions of the Special
Options are not set forth in the Employment Agreement or the Chairman
Agreement, as the case may be, the terms of the Plan shall apply to the
Special Options.
17
<PAGE>
PARK PLACE ENTERTAINMENT CORPORATION
3930 HOWARD HUGHES PARKWAY
LAS VEGAS, NEVADA 89109
(702) 699-5000
December 21, 1998
Park Place Entertainment Corporation
3930 Howard Hughes Parkway
Las Vegas, Nevada 89109
Re: Registration Statement on Form S-8
45,000,000 Shares of Common Stock, par value $0.01 per share
------------------------------------------------------------
Ladies and Gentlemen:
I am Executive Vice President - Law & Corporate Affairs and
Secretary of Park Place Entertainment Corporation (the "Company"). At your
request, I have examined the Form S-8 Registration Statement (the
"Registration Statement") which you intend to file with the Securities and
Exchange Commission in connection with the registration under the Securities
Act of 1933, as amended, of 45,000,000 shares of Common Stock, par value
$0.01 per share (the "Shares") of the Company, issuable pursuant to the
Company's 1998 Stock Incentive Plan (the "Plan").
I am familiar with the proceedings undertaken in connection with
the authorization and issuance of the Shares under the Plan. Additionally, I
have examined such questions of law and fact as I have considered necessary
or appropriate for purposes of this opinion.
Based upon the foregoing, I am of the opinion that the Shares have
been duly authorized, and upon the issuance of the Shares under the terms of
the Plan and delivery and payment therefor of legal consideration at least
equal to the aggregate par value of the Shares issued, such Shares will be
validly issued, fully paid and nonassessable.
<PAGE>
Park Place Entertainment Corporation
Page 2
I consent to your filing this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ Clive S. Cummis
Clive S. Cummis
Executive Vice President - Law &
Corporate Affairs and Secretary
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Form S-8 Registration Statement of our reports dated August
7, 1998 on the consolidated financial statements of Park Place Entertainment
Corporation as of December 31, 1997 and 1996 and for each of the three years
in the period ended December 31, 1997, included in or incorporated by
reference in the Park Place Entertainment Corporation's Registration
Statement filed on Form 10 with the Commission on October 23, 1998, as
amended on December 18, 1998, and to all references to our Firm included in
this Registration Statement.
/s/ ARTHUR ANDERSEN LLP
Los Angeles, California
December 16, 1998
